Deals above $10 million take roughly twice as long to reach a term sheet as comparable deals below that threshold with identical fundamentals. The asset did not get more complicated. The capital structure around it did.
Federal banking regulations cap most regional banks at 15 percent of their total capital on any single borrower. For the majority of regional lenders, that translates to a hard ceiling somewhere between $8 million and $20 million depending on the institution’s size. Around $10 million is where single-institution capacity typically runs out.
Most originators miss the line because they have never been told where it sits. They submit a $12 million request to a regional bank, wait three weeks for a response, and learn the bank tops out at $8 million in single-asset exposure. The deal was not moving. It never was.
Why $10M Turns One Credit Committee Into Two
Below $10 million, one decision-maker at one institution can approve and hold the entire loan. Execution speed is a function of how well the package is prepared and how well the lender knows the market.
Above $10 million, the primary lender often needs a participant. That participant is a separate institution with its own credit committee, its own underwriting standards, and its own timeline. The lead lender cannot commit to terms until the participant signs off. The participant will not start their review until they receive the full package from the lead. Approvals that used to run in parallel now run sequentially.
The timeline compounds quickly. A well-packaged deal under $10 million with a motivated lender can reach a term sheet in two to three weeks. The same quality deal above $10 million requiring syndication routinely takes six to ten weeks because two separate institutions have to complete independent reviews before anyone can issue a binding term sheet.
That is the best-case scenario. It assumes the lead lender already has a participant relationship in place and that both credit committees are aligned on the asset type, geography, and sponsor profile.
Two credit committees do not add time arithmetically. They add it exponentially.
What Changes in the Underwriting Package Above $10M
Below $10 million, a strong personal financial statement and two years of operating history is generally enough to clear a regional bank’s credit review.
Above $10 million, lenders want to know how the sponsor gets paid back if something goes wrong, and they want to see the liquidity to prove it. Verified cash positions, corporate organizational structure, unencumbered assets, and a clear exit strategy are not optional at this size. Lenders at this tier are underwriting the downside, not the upside.
The expectation is a complete package on day one: verified liquidity schedules, a corporate org chart, historical operating statements, and a downside scenario that models what happens to the loan if net operating income drops 20 percent. Sponsors who arrive with a package built for a $5 million loan will not make it through triage. The lender recognizes immediately that the documentation does not meet institutional standards.
A package built for a $5M loan does not survive first review at $12M. The lender moves on.
The Two Questions That Determine Whether a Deal Routes Correctly
If you route a $13 million request the same way you route a $6 million request, you are going to generate submissions that do not match. The lender pool is smaller, the package requirements are higher, and the timeline expectations are longer.
The routing decision for any deal above $10 million should start with a different question. Not which lenders are active in this market, but which lenders have the balance sheet to hold this note without a participant. If the answer is none at the target loan amount, the next question is which lead lenders have established participant relationships and are willing to run a syndicated process on this asset type.
Those are two different questions and they require two different sets of lender relationships to answer correctly. Running that conversation before your deal is in-market rather than after a submission lands is what separates the teams that route efficiently from the ones that discover the constraint after four weeks of waiting.
The Practical Move
Before any deal above $10 million goes to market, establish two things: which lenders can hold the note at this size without syndication, and which lead lenders have active participant relationships for this asset type and geography.
Those conversations take five minutes if you have the right relationships. They cost four weeks if you discover the constraint after a submission is already in review.
A syndicated deal is not a bigger deal. It is a different deal. Build the infrastructure — lender relationships, documentation standards, downside modeling — before the deal requires it. The brokers who move enterprise volume consistently have not simply done more of what works below $10 million. They have built a different set of tools for a different category of transaction.
LoanBase helps you identify which lenders can hold the note at size and which are actively running syndicated processes, so routing decisions at the enterprise level are based on current capacity rather than guesswork.
