The 8 Fields Your Bank Won't Put on the First Term Sheet and How to Demand Them

The Transparency Problem in Commercial Lending

Commercial bank term sheets hide execution risk in legal structures, not just headline rates — and we understand the frustration borrowers face when critical terms appear only in dense legal documents after weeks of diligence. The opacity problem stems from a fundamental misalignment: lenders design term sheets to preserve negotiating flexibility, while borrowers need a clear bank loan negotiation checklist to demand transparent term sheet terms and make confident decisions.

Traditional banks bury risk in  floating rate mechanics  and cross-collateralization clauses that trigger portfolio-wide defaults when 1 loan underperforms. Borrowers struggle to  identify true costs  when critical terms appear in footnotes rather than documented in writing. A 6% interest rate looks competitive until you discover a 3% origination fee, a 2% prepayment penalty, and quarterly facility fees totaling another 1.5% annually.

Operators accustomed to fintech "factor rates" lack preparation for bank covenant complexity. Purchase order financing through alternative lenders typically offers simple payback structures, while traditional bank facilities introduce debt service coverage ratio (DSCR) minimums and liquidity covenants that trigger technical default even when payments remain current. The "clarity gap" creates stalled deals during diligence when borrowers discover misunderstood terms embedded in final loan documents.

While the Truth in Lending Act (TILA) disclosure rules apply to consumers, commercial borrowers historically lacked similar protections — though some states including  California (SB 1235)  and  New York (SB 5470)  have introduced disclosure requirements for certain commercial loan types. Bank loan hidden fees inflate effective cost by several percentage points when left unchecked, yet business loan term sheet transparency remains the exception rather than the rule in commercial lending.

Send us your  existing term sheet . We'll help you identify which of the 8 critical fields are missing and what to demand in writing.

Your Bank Loan Negotiation Checklist: 8 Fields Every Borrower Should Demand in Writing

The 8 fields banks routinely omit are all-in APR, prepayment penalty schedule, personal guarantee scope, cross-default triggers, financial covenant thresholds, rate adjustment caps, fee breakdown, and collateral release conditions — and demanding these upfront eliminates execution risk before you commit.

1. All-in APR

All-in APR calculates the effective cost of capital by incorporating interest rate, origination fees, facility fees, and closing costs into 1 standardized metric. Nominal interest rate excludes ancillary charges that inflate total payback, making it impossible to compare offers across lenders. Demand effective APR calculation before comparing offers so you can evaluate true cost of capital across traditional banks, specialty lenders, and marketplace platforms. Bridge automatically surfaces APR alongside factor rates in our standardized term sheets.

2. Prepayment Penalty Schedule

Prepayment penalties determine your exit cost when refinancing or selling the asset. Penalty structures include step-down schedules, yield maintenance clauses, and flat-fee arrangements. Fixed-rate CRE and CMBS loans typically include prepayment penalties to protect lender yield; floating-rate structures are less likely to but still impose fees during the initial lock period. Know your exit cost before refinancing or early payoff by demanding a written prepayment schedule showing penalty amount by year and whether partial prepayment is allowed. Marketplace offers tend to have fewer restrictions on early repayment.

3. Personal Guarantee Scope

 Unlimited guarantees  hold you liable for full loan balance if your business defaults, exposing personal assets including primary residence and retirement accounts to creditor claims.  "Bad boy" carve-outs  limit liability to fraud or misappropriation rather than general business failure, protecting your personal net worth during normal insolvency. Non-recourse CRE structures offer stronger borrower protection by limiting lender recovery to collateral value. Bridge surfaces guarantee scope upfront so you can compare bank vs alternative lender terms before committing.

4. Cross-Default Triggers

 Cross-default provisions  declare default when you default elsewhere, even if the specific loan is performing. One missed payment on another facility can trigger portfolio-wide acceleration, giving lenders authority to call all loans simultaneously. Negotiate narrow trigger definitions tied to specific loan performance and demand that cross-default clauses apply only to loans with the same lender. Cross-collateralization clauses extend this risk further by pooling assets across multiple loans.

5. Financial Covenant Thresholds

 DSCR below 1.0  signals insufficient cash flow for debt service and triggers default even when payments remain current. Covenant violations give lenders authority to accelerate repayment or demand immediate cure through additional equity injection or asset sales. Model your pro forma against covenant minimums before signing to confirm you maintain covenant compliance even during operational disruptions. Use our  pro forma builder  to test covenant scenarios against projected cash flow, especially during seasonal revenue cycles common in hospitality and retail.

6. Rate Adjustment Caps

Floating-rate loans require defined ceilings on rate increases to protect against debt service volatility. Cap structures limit maximum rate movement over the loan term. Lock in rate adjustment floors and ceilings before committing by demanding written terms specifying maximum rate, periodic adjustment caps, and lifetime caps. For example, under a hypothetical stress-test scenario where benchmark rates rise 300 basis points, a $2M loan at Secured Overnight Financing Rate (SOFR) plus 3% without caps could see annual debt service increase by $60,000 — but rate caps would limit this exposure. Operators managing seasonal cash-flow stress benefit from predictable rate caps.

7. Fee Breakdown

Origination fees typically range 1–6% of principal and are charged upfront, reducing net loan proceeds available for operations. Ancillary fees inflate cost by several percentage points when buried in fine print: facility fees, legal fees, diligence fees, documentation fees, and closing costs. Itemize facility, diligence, documentation, and closing costs separate from loan amount. Bridge's standardized format exposes each fee line item for direct comparison across lenders.

8. Collateral Release Conditions

Collateral release conditions specify when assets are released upon partial paydown or loan maturity. Define release criteria before pledging cross-collateralization to prevent lenders from retaining collateral beyond repayment. Some structures allow proportional release as principal amortizes; others require full repayment before any collateral is freed. Partial release clauses enable operators to free individual properties or assets by paying down a defined percentage of principal. Asset substitution provisions allow borrowers to swap collateral of equal or greater value. Understanding release conditions is critical for operators planning to refinance individual properties or sell assets before loan maturity.

Request your  standardized term sheet . We'll compare offers across the 8 fields and give you the specific line items to negotiate with your bank.

The Comparison Leverage Play

Standardized marketplace term sheets convert bank opacity into negotiable line items — and we've seen borrowers secure covenant flexibility and fee reductions by presenting transparent competitor data.  Clear comparison formats  enable data-driven decisions over guesswork. Present transparent competitor offers to force banks to clarify their own terms.

We normalize complex structures into comparable metrics like total payback and effective APR so you gain leverage to challenge bank opacity. When you compare bank vs alternative lender terms side-by-side, you can demand clarity on the 8 fields banks routinely omit. Even if you choose the bank, marketplace benchmarking uncovers hidden clauses during initial review.

Upload your documents to the  deal room . We'll generate a standardized comparison you can use to challenge bank opacity and negotiate better terms.

What to Expect After Requesting Transparent Terms

We manage the financing process from request to term sheet to funding — here's the exact timeline. Within 48 hours, receive initial lender matches aligned with your sector and deal structure. During document review, upload T-12s (trailing 12 months of financial statements), pro formas, and property details to the centralized deal room for fast lender access.

At term sheet delivery, compare standardized offers with the 8 fields clearly disclosed. We provide negotiation support so you can use marketplace data to challenge bank opacity or negotiate better terms. We coordinate diligence timelines and lender requests through close, then help you review final documentation to confirm all 8 fields are documented in writing before signing.

Start your  request . We'll walk you through document collection and match you with lenders who disclose all 8 fields upfront.

Document Collection and Underwriting Readiness

Gather T-12s, tax returns, pro formas, property details, offering memorandum, legal documentation, and personal financial statement — then stress-test your submission against the 8 negotiable fields.

Documents to collect:

• T-12 financial statements (trailing 12 months of income statements and balance sheets)

• Tax returns (business and personal returns for the past 2–3 years)

• Pro forma projections (revenue, expense, and cash-flow forecasts)

• Property or inventory details (asset appraisals, purchase orders, or inventory schedules)

• Offering memorandum (executive summary, market analysis, and deal narrative)

• Legal documentation (articles of incorporation, operating agreements, and existing loan documents)

• Personal financial statement (if personal guarantee is required)

Underwriting stress tests:

• Confirm all financial statements reconcile with tax returns

• Validate pro forma assumptions are conservative and supported by market data

• Ensure offering memorandum clearly explains deal structure and exit strategy

• Understand and accept personal guarantee scope before submitting

• Model covenant thresholds against worst-case cash-flow scenarios

• Review all 8 negotiable fields and address them in initial request

• Prepare competitive offers to use as negotiation leverage

Use our  pro forma builder  and  AI-powered offering memorandum generator  to standardize your submission. Organize documents in the deal room for fast lender access. Our team is available through support channels to answer questions throughout the process.

Upload your  documents . We'll review for lender readiness and flag any gaps before submission.

FAQs

Demanding the 8 fields in writing reduces execution risk, clarifies true cost of capital, and gives you negotiation leverage — even if you ultimately choose traditional bank financing.

Q: What is a "bad boy" carve-out in a personal guarantee?

A: A bad boy carve-out limits personal liability to specific fraudulent acts or misappropriation rather than general business failure. This structure protects your personal assets during normal insolvency while still holding you accountable for intentional misconduct — and we help you identify which lenders offer this protection upfront.

Q: Why do banks hide terms like cross-default triggers?

A: Banks prioritize risk mitigation over transparency. Broad cross-default clauses give lenders maximum power to call a loan if your financial health deteriorates elsewhere, even when the specific loan is performing. This approach shifts execution risk entirely to the borrower — which is why we surface these clauses before you commit.

Q: Can I really negotiate printed bank loan terms?

A: Yes. While interest rates track market benchmarks, fees, covenant thresholds, and guarantee scopes are frequently negotiable. Competitive leverage from marketplace offers gives you specific line items to challenge, forcing banks to justify or adjust their terms — and we provide the standardized data you need to negotiate confidently.

Q: How does Bridge help me negotiate if I go with a bank?

A: We generate standardized term sheets that reveal true cost of capital and hidden clauses across multiple lenders. This benchmark document gives you concrete data to challenge bank opacity and negotiate better terms, even if you ultimately choose traditional financing — because execution certainty matters more than the lender name.

Compare transparent terms before you commit.  Request financing  to receive standardized term sheets with all 8 fields disclosed — and use that clarity as negotiation leverage with your bank.