Lender Package Prep: What the Bank Needs Before It Will Credit the Deal

A signed deal with a blessed IC memo is not a done deal — not until the lender's credit committee signs off too. This episode of HoldCo examines the structural gap between the data room a deal team builds for an equity buyer and the package a bank needs to underwrite debt, and it lays out a practical framework for closing that gap before it becomes a fire drill. The conversation covers the three pillars of a lender-ready package and why each one demands deliberate preparation well before the bank sends its first formal request list: Financial model and EBITDA bridge: Lenders run deals downward, not upward — they need a stress-case toggle and covenant headroom analysis built into the model from the start, plus a standalone reconciliation from audited GAAP to adjusted LTM EBITDA that any analyst can locate in seconds inside the virtual data room. Legal structure summary: Entity tree, borrower/guarantor designations, existing liens, and intercompany loans are typically scattered across multiple folders; pulling them into a single collateral narrative — and ensuring lender counsel has the right access — prevents duplicative legal work and version-control chaos. Change-of-control consent tracker: If the deal team has already triaged material contracts for assignment restrictions and consent requirements, sharing that output proactively (with status updates) spares the lender from running the same exercise and arriving at a different answer. Tools built for change-of-control review make it easier to surface and document this work early. The credit memo as an argument, not a summary: The information memorandum or credit memo should make an affirmative case for debt serviceability — and every factual claim should include an explicit cross-reference to the supporting document's folder path in the data room, eliminating early-morning email chains and multi-day latency. Folder architecture from day one: Building a lender-ready folder structure alongside the equity-buyer structure — and using saved document sets or views to pre-define the lender package as a shareable collection — means assembly at the critical moment is a packaging exercise, not a new analysis. Granular permissions make it straightforward to expose exactly the right materials to lender counsel without restructuring the room. Timing is everything: The stress case, the EBITDA bridge, the legal summary, and the consent tracker should all be substantially complete by IC approval — the bank's first formal request list should confirm the package, not initiate it. For more context on structuring a diligence process that serves multiple downstream audiences, see the M&A due diligence guide and the virtual data room guide at VDR.ai. And for a different angle on deal structure and long-term planning, check out Sell, Defer, and Leave a Legacy: How CRTs Change the M&A Game from the HoldCo back catalogue. VDR