Answer: Hard money closing costs are the fees paid at loan settlement to cover origination, title, appraisal, legal documentation, and servicing setup. They run higher than conventional loans because hard money lenders accept faster timelines and greater asset risk. Transparency at closing is not optional — it is the legal and reputational foundation of every private lending operation.

Key Takeaways

  • Hard money closing costs reflect real operational expenses — origination, title insurance, appraisal, legal docs, and escrow — not arbitrary lender profit.
  • Points (origination fees) are the largest lender-controlled cost and compensate for short-term, higher-risk capital deployment.
  • Professional loan servicing, boarded at closing, creates an auditable payment record that protects lenders in default, sale, and regulatory scrutiny scenarios.
  • MBA SOSF 2024 data puts performing loan servicing at $176/loan/year and non-performing at $1,573 — the cost difference makes early servicing setup a direct risk-management tool.
  • California DRE trust fund violations remain the #1 enforcement category as of August 2025 — proper escrow and closing protocols are not administrative formalities.
  • Borrowers and note investors both benefit from itemized, documented closing disclosures — opacity creates legal exposure, not protection.
  • The private lending market reached $2 trillion AUM in 2024, with top-100 volume up 25.3% — deal volume at this scale demands standardized, defensible closing and servicing infrastructure.

Table of Contents

  1. What Are Hard Money Closing Costs?
  2. What Do Origination Points Actually Pay For?
  3. Title, Escrow, and Legal Fees: Why Each Line Item Exists
  4. How Are Appraisal and Valuation Costs Structured in Hard Money?
  5. Is the “Hidden Fees” Myth Real or Manufactured?
  6. How Do Hard Money Closing Costs Compare to Conventional Loans?
  7. Why Does Servicing Setup Belong at Closing, Not After?
  8. What Disclosure Requirements Apply to Private Lenders at Closing?
  9. Why Is Escrow and Trust Fund Compliance a Closing-Table Issue?
  10. Can Hard Money Closing Costs Be Negotiated — and Should Lenders Engage?
  11. How Do Closing Costs Affect Note Liquidity and Saleability?
  12. What Should Every Private Lender Verify Before Signing Off?
  13. Summary and Next Steps

Dive Deeper

This is the authoritative pillar post on hard money closing costs and transparency in private lending. The satellite posts below go deeper on specific dimensions of the topic.

Fees, Structure & Approval

Valuation & Due Diligence

Servicing & Post-Closing Operations

Exit Strategies & ROI

Strategy & Market Context

What Are Hard Money Closing Costs?

Hard money closing costs are all fees and charges paid at loan settlement beyond principal — covering origination, title work, appraisal, legal documentation, escrow setup, and initial servicing boarding. These costs exist in every private mortgage transaction and serve specific, verifiable functions.

Where hard money differs from conventional mortgages is in proportion and composition. Conventional lenders spread risk over 15-30 year amortization schedules and can absorb origination overhead into long-term interest income. Hard money lenders deploy capital for 6-24 month terms, take on assets that banks decline, and move on timelines measured in days rather than weeks. Those structural realities produce higher upfront fees that are operationally justified, not arbitrary.

The private lending market now stands at $2 trillion in AUM, with top-100 lender volume up 25.3% in 2024 (Geraci LLP Private Lender Report). At that scale, closing cost transparency is not just ethical — it is a competitive differentiator. Lenders who provide detailed, itemized settlement statements build borrower relationships that generate repeat deal flow. Those who obscure fees face regulatory exposure, borrower disputes, and damaged note saleability.

For a deeper breakdown of how fees layer across the life of a hard money deal, see Hard Money Loan Fees: Dispelling the Hidden Cost Myth for Investors.

What Do Origination Points Actually Pay For?

Origination points are the lender’s compensation for underwriting, processing, and funding a short-term, higher-risk loan — and they represent the single largest lender-controlled cost at closing. One point equals one percent of the loan amount.

Hard money lenders charge more points than conventional lenders for three concrete reasons. First, the underwriting process is asset-intensive and manual — evaluating distressed or non-standard properties requires specialized expertise that automated systems cannot replicate. Second, the cost of capital for private lenders is higher than for bank-funded products; those costs pass through to origination. Third, the loan term is short, which means the lender has fewer months of interest income to amortize origination overhead.

Points in the range of 2-5% are standard across the private lending industry, though rates vary by market, deal complexity, borrower profile, and lender. Borrowers who treat points as a surprise cost are working with lenders who failed at disclosure — not with lenders who are overcharging. Lenders who itemize exactly what each point covers in writing face fewer disputes and stronger enforcement positions if a deal goes sideways.

The key lender discipline: issue a term sheet that includes estimated points before any due diligence work begins. Changing the points figure at closing is the single fastest way to destroy borrower trust and invite regulatory scrutiny.

Title insurance, escrow services, and legal document preparation are non-negotiable closing costs in any mortgage transaction — private or conventional. Each serves a distinct protective function for the lender.

Title insurance protects the lender’s lien position against prior claims, undisclosed liens, boundary disputes, or chain-of-title defects. A lender who closes without a lender’s title policy is accepting an uncapped legal liability on every dollar deployed. Lender’s title policies are typically priced as a one-time premium at closing.

Escrow services provide a neutral, bonded third party to hold funds and documents during the closing process, verify conditions are met before disbursement, and create a documented custody record. For private lenders, escrow records become evidence in any future dispute about whether funds were properly disbursed.

Legal and document preparation fees cover promissory note drafting, deed of trust or mortgage preparation, loan agreement review, and state-specific disclosure documents. Cutting corners on document preparation is the most expensive economy in private lending — a defectively drafted note is unenforceable, and an unenforceable note is an unsecured position in foreclosure.

California DRE’s August 2025 Licensee Advisory identified trust fund handling as the #1 enforcement category — a direct signal that escrow and fund custody practices at closing are under active regulatory review. See Hard Money Due Diligence: Why Bricks and Mortar Aren’t Enough for the broader due diligence framework these fees support.

Expert Perspective

From the servicing side, the most preventable problems we see are traceable to closing-table shortcuts. A lender who skips proper escrow documentation or uses a generic promissory note template saves a few hundred dollars at origination and spends tens of thousands reconstructing records when the loan defaults or when a note buyer demands a complete data room. The closing process is not overhead — it is the legal infrastructure the entire loan rests on. Every line item on the settlement statement is cheaper than the alternative of not having it.

How Are Appraisal and Valuation Costs Structured in Hard Money?

Appraisal and valuation fees in hard money deals are structured around the specific information lenders need: as-is value, after-repair value (ARV), and in some cases liquidation value. These three figures drive every underwriting decision, and the fees reflect the specialized work required to produce them reliably.

Standard residential appraisals, designed for 30-year owner-occupied mortgages, do not serve hard money lender needs. An investment property in distressed condition requires an appraiser with comparable sales access for similar assets, knowledge of local renovation cost benchmarks, and the ability to model ARV based on realistic rehab assumptions rather than hypothetical finishes. That expertise carries a premium over a standard appraisal.

Hard money lenders in fast-moving markets often use a dual-track approach: a broker price opinion (BPO) or desktop valuation for speed at initial commitment, followed by a full appraisal before final funding. Borrowers who understand this structure see two valuation-related charges on their settlement statement. Both are legitimate — the BPO enabled a fast term sheet; the appraisal provides defensible collateral documentation for the loan file.

The lender’s obligation is to explain which valuation method is being used and why. The borrower’s obligation is to read the appraisal before closing. See Hard Money & Property Appraisals: What Lenders Really Look For in Value Assessment for a full treatment of valuation methodology.

Is the “Hidden Fees” Myth Real or Manufactured?

The “hidden fees” narrative in hard money lending is partially real and partially manufactured — and understanding which part is which protects both lenders and borrowers.

The manufactured part: hard money closing costs are not inherently hidden. Every legitimate cost — origination, title, appraisal, legal, escrow, recording — has a standard industry rationale. When borrowers call these costs “hidden,” they usually mean unexpected. That is a disclosure failure, not a fee fraud problem.

The real part: some lenders do add fees that serve no clear borrower benefit — processing fees, document review fees, administrative fees, and “broker yield spread” charges that are buried in closing statements. These fees exist, and they are the source of the industry’s transparency problem. The solution is not to eliminate all fees; it is to require itemized disclosure of what every fee covers before the borrower commits to the deal.

For lenders, the reputational and legal math is simple: an undisclosed fee that produces a $500 profit at closing destroys note saleability worth multiples of that amount if a note buyer’s due diligence reveals disclosure problems. Borrowers who feel misled at closing do not provide referrals, do not return for second loans, and file complaints with state regulatory bodies.

See Debunking the Loan Shark Myth: Hard Money Lenders as Strategic Real Estate Partners for how transparency practices reshape borrower perception of private lenders.

How Do Hard Money Closing Costs Compare to Conventional Loans?

Hard money closing costs are higher than conventional mortgage closing costs, and they are higher for reasons that are structurally necessary rather than opportunistic. The comparison matters because borrowers who evaluate hard money against conventional financing without understanding the structural differences will always perceive hard money as expensive — even when it is the correct tool for the deal.

Conventional loans carry origination fees in the range of 0.5-1% and closing costs totaling 2-5% of the loan amount. Hard money origination fees of 2-5 points, plus similar third-party costs, produce total closing cost loads of 4-8% or more depending on deal complexity and state. The delta is real.

What the comparison misses: conventional loans are unavailable for most hard money use cases. A distressed property requiring $150,000 in rehabilitation does not qualify for a conventional purchase mortgage. A borrower with a 580 credit score and a 30-day closing deadline does not have a conventional option. The relevant comparison is not hard money versus conventional — it is hard money versus not doing the deal, or hard money versus a missed acquisition window in a competitive market.

For a structured comparison of when each product type serves lender and borrower goals, see Hard Money vs. Traditional Loans: Which Is Best for Your Goals?

Expert Perspective

Lenders who obsess over closing cost comparisons with conventional products are solving the wrong problem. The private borrower who walks into a hard money deal has already been declined or bypassed conventional channels. What they need from the closing table is speed, certainty, and a complete, defensible loan file. When those three things are present, the fee level becomes secondary. When they are absent, no amount of low fees preserves the relationship — or the deal.

Why Does Servicing Setup Belong at Closing, Not After?

Servicing setup at closing — rather than weeks after funding — is the single operational decision that most directly determines the long-term quality of a private loan file. Every day a loan exists without a formal servicing record is a day that creates audit gaps, payment tracking ambiguity, and escrow exposure.

The MBA’s Survey of Operating Strategy and Fees (SOSF) 2024 quantifies the consequence: performing loans cost $176/loan/year to service; non-performing loans cost $1,573/loan/year. The difference is not primarily in workout fees — it is in the accumulation of documentation deficiencies that make non-performing loans expensive to manage and resolve. Loans that are properly boarded at closing start their servicing life with clean records, accurate payment schedules, and complete borrower data. That foundation is what keeps them in the $176 category.

Professional servicing setup at closing includes: payment schedule installation, borrower contact record setup, escrow account establishment (where applicable), insurance tracking activation, and initial regulatory disclosure delivery. That process, when done manually, historically took 45 minutes of paper-intensive intake work per loan. Properly automated, it compresses to under one minute — eliminating the incentive to delay boarding until “after everything settles down.”

Lenders who board loans at closing rather than post-funding also create a cleaner record for future note sales. Note buyers reviewing a data room want to see servicing history from day one. A gap between funding and boarding is a question mark that reduces note value. See Hard Money Loan Servicing: Post-Funding Explained for the full post-closing servicing workflow.

What Disclosure Requirements Apply to Private Lenders at Closing?

Disclosure requirements for private lenders at closing vary by loan type, jurisdiction, and whether the transaction is business-purpose or consumer. Getting this wrong produces regulatory liability that dwarfs any closing cost savings from cutting corners on legal review.

Business-purpose loans (the primary hard money use case) are generally exempt from TILA and RESPA disclosure requirements that apply to consumer mortgages. “Generally” is the operative word — exemption analysis requires state-specific review, and the business-purpose determination must be documented in the loan file. A borrower who later claims a loan was actually for personal use, when the file lacks documentation establishing business purpose, creates significant TILA exposure for the lender.

Consumer fixed-rate loans serviced under the private lending framework carry full TILA, RESPA, and applicable state disclosure obligations. These include the Loan Estimate, Closing Disclosure, right of rescission notices, and applicable state-mandated borrower rights disclosures.

State-level requirements add a second layer. California, for example, imposes specific disclosure requirements under the California Finance Lenders Law (CFLL) and Real Estate Law for loans brokered by licensed DRE brokers. Other states have similar broker disclosure mandates. Consult a qualified attorney familiar with both state lending law and federal exemption analysis before structuring any private mortgage transaction.

Why Is Escrow and Trust Fund Compliance a Closing-Table Issue?

Escrow and trust fund compliance is a closing-table issue because the most common enforcement violations in private lending originate at the moment funds are received — not when they are disbursed. California DRE’s August 2025 Licensee Advisory identified trust fund handling violations as the #1 enforcement category, a finding consistent with patterns across multiple state regulatory bodies.

Trust fund violations in private lending typically fall into three categories: commingling (mixing borrower funds with lender operating accounts), failure to maintain proper records, and unauthorized disbursement before all closing conditions are satisfied. Each category is preventable with proper escrow structure and a disciplined closing protocol.

The practical lender requirement: all borrower funds received prior to closing must go into a properly established trust or escrow account, managed by a licensed escrow company or attorney trust account, with written authorization required for any disbursement. The cost of maintaining this structure is built into the escrow fees on the settlement statement. The cost of not maintaining it is regulatory action, license jeopardy, and personal liability exposure.

For lenders who hold escrow for taxes and insurance post-closing, the compliance obligation extends beyond the closing table into ongoing servicing. Professional servicers maintain escrow accounts with full audit trails and annual reconciliation reports — a function that self-servicing lenders routinely handle inadequately.

Expert Perspective

Trust fund compliance is the enforcement category that surprises lenders most. They focus on disclosure and usury rules and assume escrow is administrative. It is not. We see lenders who process payments into the wrong account, blend escrow with operating funds, or disburse before title clears — and then face regulatory actions that could have been prevented entirely by engaging a professional servicer at boarding. The escrow line item on your closing statement is not overhead. It is the fee that keeps your license intact.

Can Hard Money Closing Costs Be Negotiated — and Should Lenders Engage?

Hard money closing costs are negotiable in some components and fixed in others. Lenders who understand the difference negotiate appropriately; those who treat all fees as negotiable damage deal quality and third-party relationships.

Fixed or near-fixed costs: Title insurance premiums are typically regulated by state insurance commissioners and are not lender-controlled. Recording fees are set by county recorders. Government transfer taxes are statutory. Appraisal fees reflect a market-rate service — aggressive price negotiation on appraisals is a signal to the appraiser, and a risk to valuation independence.

Negotiable components: Origination points are the primary negotiating lever. Lenders set points based on risk assessment, and borrowers with strong collateral, demonstrated execution track records, or repeat relationships routinely negotiate reduced origination. Some lenders also have flexibility on document preparation fees when using in-house or retained legal counsel.

For lenders on the origination side, the more important discipline is consistency. A lender who charges different points to different borrowers without a documented, risk-based rationale creates fair lending exposure. Standardized rate sheets with defined criteria for adjustments — LTV thresholds, geographic risk, borrower experience — provide both business discipline and regulatory defensibility.

See What Hard Money Lenders Really Want in Your Loan Proposal for how borrowers can structure proposals that make cost negotiation more productive for both parties.

How Do Closing Costs Affect Note Liquidity and Saleability?

Closing costs affect note liquidity in a counterintuitive way: higher, properly documented closing costs produce more liquid notes than lower, poorly documented ones. Note buyers are not buying yield in isolation — they are buying a legal instrument with a documented history. The quality of that documentation starts at closing.

A note buyer’s due diligence checklist for a hard money loan includes: the original promissory note and deed of trust, the title policy, the appraisal report, the settlement statement (HUD-1 or Closing Disclosure equivalent), the servicing history from boarding to present, and any modification or extension agreements. Every one of those documents is a closing-table deliverable. Notes that arrive at the point of sale with incomplete closing packages trade at discounts that far exceed the original cost of producing those documents correctly.

The $2 trillion private lending market includes an active secondary market where properly documented notes at fair market terms sell efficiently. Improperly documented notes — regardless of payment history — require buyers to price in title risk, legal enforceability risk, and servicing record reconstruction costs. That discount is real and measurable.

Professional servicing that begins at closing creates the continuous documentation chain that note buyers require. For lenders who intend to hold notes to maturity, this documentation is equally important — it is the evidentiary record for any default enforcement action. See Mastering Hard Money Exits: Refinancing, Note Sales & Professional Servicing for the full exit-planning framework.

What Should Every Private Lender Verify Before Signing Off?

Every private lender needs a closing checklist that operates independently of the closing agent’s or borrower’s review. The lender’s interests at closing are specific and require specific verification.

Title and lien position: Confirm the title commitment shows the lender’s lien in the intended priority position with no exceptions that compromise enforcement. Verify all existing liens identified in title search are either being paid off at closing or are senior positions the lender has underwritten.

Insurance: Confirm the lender is named as mortgagee/loss payee on the property insurance policy effective at closing. No lender should fund without a bound insurance certificate naming them in this capacity.

Document completeness: Verify the signed promissory note, deed of trust or mortgage, any personal guarantees, and all applicable state disclosure documents are in the file before funds are released.

Servicing boarding confirmation: Confirm the loan is queued for professional servicing boarding — payment schedule entered, borrower account created, first payment notice scheduled. This step is the bridge between a closed loan and a managed asset.

Settlement statement reconciliation: Line-by-line reconciliation of the settlement statement against the term sheet. Any variance requires explanation and written acknowledgment before closing proceeds.

For the qualification and underwriting framework that precedes this closing checklist, see Hard Money Loan Qualification for Real Estate Investors.

Frequently Asked Questions

What are typical closing costs for a hard money loan?

Hard money closing costs typically range from 4-8% of the loan amount when all components are included: origination points (2-5%), title insurance, appraisal, legal document preparation, escrow, and recording fees. The range varies by state, deal complexity, loan size, and lender. Always request an itemized estimate before committing to any private loan.

How many points do hard money lenders charge at closing?

Hard money lenders commonly charge 2-5 origination points at closing. One point equals one percent of the loan amount. Points compensate the lender for underwriting, processing, and funding a short-term, higher-risk loan. Borrowers with strong collateral positions, low LTV ratios, or established lender relationships negotiate lower points in many cases.

Are hard money closing costs tax deductible?

Many hard money closing costs — including origination fees, points, and certain financing costs — are deductible as business expenses for investment property loans. Consult a qualified tax professional for guidance specific to your deal structure and entity type. This post does not constitute tax advice.

What is the difference between a lender’s title policy and an owner’s title policy at hard money closing?

A lender’s title policy protects the lender’s lien interest against title defects — it is the lender’s required protection and is standard in every properly closed private mortgage. An owner’s title policy protects the borrower’s ownership interest. Hard money lenders require the lender’s policy; the owner’s policy is the borrower’s separate decision. Both are issued at closing based on the same title search.

Can closing costs be rolled into a hard money loan?

Some hard money lenders allow certain closing costs to be financed as part of the loan principal, which reduces the borrower’s cash-at-closing requirement but increases the loan balance and interest cost over the loan term. Whether this is available depends on the lender’s LTV parameters and the property’s appraised value. Rolling in closing costs that push LTV beyond the lender’s underwriting guidelines is not feasible regardless of borrower preference.

What closing costs can be negotiated in a hard money deal?

Origination points are the primary negotiable component. Legal and document preparation fees have some flexibility when lenders use retained counsel. Title insurance premiums and recording fees are generally set by state regulation or county schedules and are not negotiable. Appraisal fees reflect third-party market rates and aggressive negotiation risks appraiser independence — a risk to the lender, not just the borrower.

Why do hard money loans close faster than conventional loans if they have more fees?

Hard money loans close faster because the underwriting process is asset-focused rather than borrower-credit-focused. The lender’s primary analysis is the collateral value, not a 60-day documentation and verification process. The higher fees reflect the lender’s cost of maintaining capital availability, operational infrastructure for rapid deployment, and the risk premium on non-standard assets — not the time taken to close.

What happens if closing costs are not disclosed properly in a hard money transaction?

Improper disclosure of closing costs creates regulatory exposure under applicable state lending and broker laws, TILA where applicable, and general fraud and misrepresentation law. California DRE and equivalent state regulators actively enforce disclosure requirements. The practical consequences include regulatory fines, license action, loan rescission rights for borrowers, and damaged note saleability. Consult a qualified attorney on disclosure requirements before originating any private mortgage loan.

Do hard money closing costs affect the note’s resale value?

Yes — but in a counterintuitive direction. Notes with complete, properly documented closing packages (title policy, appraisal, settlement statement, executed loan documents) trade at higher values in the secondary market than notes with documentation gaps. The closing cost investment produces documentation that supports note liquidity. Notes with incomplete files require buyers to price in legal and title risk, producing discounts that exceed the original documentation cost.

Is a hard money loan’s closing statement the same as a conventional HUD-1 or Closing Disclosure?

Private lenders use various settlement statement formats depending on state requirements, loan type, and whether the transaction involves a licensed escrow company. Business-purpose hard money loans are generally not subject to the federal Closing Disclosure requirement that applies to consumer mortgages, but many lenders and title companies use equivalent itemized formats as a best practice. Consumer fixed-rate private mortgage loans carry full RESPA disclosure obligations including the Closing Disclosure. Consult a qualified attorney for state-specific requirements.

How does professional loan servicing relate to closing costs?

Professional loan servicing setup is a closing-related cost that some lenders treat as a post-funding administrative task and others treat as a closing-table requirement. Boarding the loan at closing rather than weeks later creates a continuous servicing record from day one, eliminates audit gaps, and significantly reduces the cost and complexity of any future default management, note sale, or regulatory review. The cost of servicing boarding is modest relative to the loan balance; the cost of the documentation gaps it prevents is not.

What disclosures do private lenders need to provide for business-purpose hard money loans?

Business-purpose hard money loans are generally exempt from TILA and RESPA consumer disclosure requirements, but lenders must document the business-purpose determination in the loan file. State-level disclosure requirements — under California CFLL, equivalent state broker laws, and applicable fair lending regulations — apply independently of federal exemptions. The specifics vary by state and lender license type. Consult a qualified attorney before structuring any private mortgage transaction. This post does not constitute legal advice.

Sources & Further Reading

  1. Mortgage Bankers Association. Survey of Operating Strategy and Fees (SOSF) 2024. Washington, DC: MBA, 2024. [Performing loan servicing cost: $176/loan/year; Non-performing: $1,573/loan/year]
  2. California Department of Real Estate. Licensee Advisory: Trust Fund Handling — August 2025. Sacramento: CA DRE, 2025. [Trust fund violations identified as #1 enforcement category]
  3. Geraci LLP. Private Lender Report 2024. [Private lending market: $2T AUM; top-100 volume +25.3% in 2024]
  4. Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure Rule (TRID) Implementation Guidance. Washington, DC: CFPB. Available at: consumerfinance.gov. [Disclosure requirements applicable to consumer mortgage transactions]
  5. ATTOM Data Solutions. U.S. Foreclosure Market Report Q4 2024. [National foreclosure timeline: 762 days average; judicial foreclosure cost: $50,000-$80,000; non-judicial: under $30,000]
  6. J.D. Power. 2025 U.S. Primary Mortgage Servicer Satisfaction Study. [Servicer satisfaction score: 596/1,000 — all-time low; underscores the market differentiation opportunity in professional servicing]

Summary and Next Steps

Hard money closing costs are not a problem to be minimized — they are a framework to be understood and documented correctly. Every line item on a private mortgage settlement statement serves a function: origination points compensate for risk and speed; title insurance protects lien enforceability; appraisal fees ground underwriting in verifiable value; legal fees create enforceable loan instruments; escrow fees ensure compliant fund custody.

The lenders who succeed at scale in the $2 trillion private lending market treat the closing table as the foundation of every downstream outcome — borrower relationships, note liquidity, regulatory defensibility, and default resolution. Those who treat closing as an administrative hurdle accumulate documentation gaps that surface as real costs at exactly the wrong moment.

Professional loan servicing, boarded at closing, is the operational bridge between a funded loan and a managed asset. It creates the continuous payment record and escrow documentation that performing loans require and that non-performing loans depend on. The cost differential between performing and non-performing loan servicing — $176 versus $1,573 per loan per year — is a direct financial argument for getting the closing process right the first time.

Ready to board your next hard money loan with a servicer who treats closing documentation as the foundation, not the afterthought? Contact Note Servicing Center to discuss how professional servicing setup at closing protects your portfolio from day one.

This content is for informational purposes only and does not constitute legal, financial, or regulatory advice. Lending and servicing regulations vary by state. Consult a qualified attorney before structuring any loan.