Key takeaways
- From starting document preparation to the first drawdown typically takes 4–6 months. Large projects or those with several levels of committee approval may take longer.
- If every step is done in sequence with no overlap, the process takes about 16–32 weeks, so running steps in parallel is where real time can be saved.
- The mortgage registration fee is generally 1% of the facility, capped at THB 200,000, not 0.1% of the facility.
The seven main steps
| Step | Steps | Duration | Timing |
|---|---|---|---|
| 1 | Prepare the project and documents | 1–2 months | 1–2 |
| 2 | Present the project and submit the loan application | 2–4 weeks | 2 |
| 3 | Valuation of land and buildings | 3–6 weeks | 2–4 |
| 4 | Credit analysis and Credit Committee | 4–8 weeks | 3–5 |
| 5 | Legal documentation and signing the agreements | 2–4 weeks | 5–6 |
| 6 | Open the facility and make the first drawdown | 1–2 weeks | 6 |
| 7 | Ongoing construction drawdowns | Every 4–8 weeks | 7–18 |
If taken one step at a time with no overlap, steps 1–6 add up to 16–32 weeks. The usual 4–6 months therefore rests on work being done in parallel, especially the valuation, which can start before the analysis is finished.
The timeline may stretch when documents are incomplete, the bank requests additional information, there are several levels of Credit Committee, or the project facility exceeds roughly THB 500 million.
What each step involves
- Prepare the project Feasibility Study, title deed, approved plans, building permit, BOQ, financial model, three years of audited financial statements and corporate documents.
- Submit the application Hold the first meeting with the relationship manager (RM), present an executive summary and submit the documents. The RM prepares the credit proposal, sets the facility structure and, if there is one, a term sheet is signed.
- Valuation The bank uses an approved valuation firm to value the land and buildings according to the plans, checks ownership and encumbrances, and then sets the LTV, which is often in the 60–80% range.
- Analysis and approval The bank analyses DSCR, ICR, LTV and cash flow, prepares a credit memo and submits it to the committee at the appropriate level of authority. It may request further information, until an approval-in-principle letter is issued, after which the final conditions are negotiated.
- Legal documentation Check the title deed, prepare the loan agreement, mortgage agreement and guarantee agreement, register the mortgage at the land office and sign.
- First drawdown Confirm the conditions precedent, open the project account, and submit the drawdown request and construction schedule. The bank's engineer inspects the site, then the funds are transferred.
- Ongoing drawdowns Submit a drawdown request with a progress report, the % of work completed is checked against the BOQ, a monthly report is provided, and retention is deducted as the conditions require, usually 5–10%, until practical completion.
Getting the mortgage fee right
The mortgage registration fee is generally 1% of the mortgage amount, capped at THB 200,000, for mortgages with commercial banks or private lenders as specified.
Example Mortgage amount of THB 300 million
1% × 300,000,000 = THB 3,000,000, but the amount actually paid is no more than THB 200,000
The measure reducing the mortgage fee to 0.01% is a separate matter. The most recently announced measure applies to individuals of Thai nationality buying residential property where both the price and the mortgage amount do not exceed THB 7 million, until 30 June 2027, so it does not apply to a developer's project loan. Check the latest rate with the land office before preparing the budget.
Document checklist
| Category | Document | Used at step |
|---|---|---|
| A. Borrower | Company affidavit issued within the last 3 months | 1–2 |
| Latest shareholder list | 1–2 | |
| Power of attorney, if applicable | 2 | |
| Copies of directors' ID cards or passports | 2 | |
| Three years of audited financial statements | 1–2 | |
| 12 months of bank account statements | 2 | |
| Aged receivables and payables reports | 2 | |
| B. Project | Feasibility Study covering IRR, NPV and cash flow | 1 |
| Approved construction plans | 1 | |
| Building permit (Or. 1) or evidence of notification as required by law | 1 | |
| BOQ and cost estimate | 1 | |
| Construction contract | 5 | |
| Construction schedule and milestones | 1 | |
| Financial model with 5–10 year projections | 1 | |
| Market analysis and sales plan | 1 | |
| C. Collateral | Original title deed and copy | 3 |
| Map or plot plan of the land | 3 | |
| Official appraised value | 3 | |
| Evidence of ownership or sale and purchase agreement | 3 | |
| Valuation report | 3 | |
| Evidence of encumbrances | 3 | |
| D. Legal documentation | Loan agreement | 5 |
| Mortgage agreement | 5 | |
| Guarantee agreement | 5 | |
| Spousal consent letter, if applicable | 5 | |
| Fire insurance policy and contractor's all risks (CAR) policy naming the bank as beneficiary | 5–6 | |
| E. Drawdowns | Drawing Request | 6–7 |
| Progress Report | 7 | |
| Work certificate from the project engineer | 7 | |
| Contractor invoices | 7 | |
| Dated site photographs | 7 | |
| Monthly project financial report | 7 | |
| Drawdown Schedule | 6 |
Projects that meet the EIA criteria should schedule EIA approval separately, because it is often outside the control of both the bank and the borrower and is a condition for applying for the building permit.
Timing your funds to the bank's schedule
- Allow for equity up to the first drawdown, because preparatory work comes before the loan.
- Start the valuation as soon as the RM accepts the file; do not wait for approval to be completed.
- Prepare answers to the credit attention points before submitting.
- Have a lawyer read the draft agreements from the term sheet stage to shorten the legal review rounds.
- Satisfy all conditions before drawdown, ahead of the date the contractor must be paid.
- Allow 4–8 weeks between drawdowns in the cash flow plan.