What are Lender's Legal Fees?
The Short Answer
Lender's Legal Fees explained simply
When you buy a business and get a loan, the bank or lender needs their own lawyer to prepare all the loan paperwork. You, as the buyer, are typically responsible for paying these legal fees. It's important to remember these are not your legal fees; they are the lender's. These fees cover things like drafting the loan agreement, promissory notes, security agreements, and other documents that protect the lender's interests.
Real-World Example
Buying a Business with a Loan
Let's say you're buying a business for $500,000 and getting a bank loan for $400,000. The bank's attorney charges $3,000 to prepare all the loan documents. This $3,000 is the lender's legal fees, and you, the buyer, will pay it at closing. This is in addition to any legal fees you pay your own attorney to review the purchase agreement.
Why this matters
Understanding lender's legal fees is important because they add to your total closing costs. These fees can vary, so it's good to ask your lender for an estimate early on. Knowing all your costs upfront helps you budget accurately for your business acquisition.
Always ask your lender for a detailed breakdown of all fees, including their legal fees, before you commit to a loan. This helps avoid surprises at closing.
Always ask your lender for a detailed breakdown of all fees, including their legal fees, before you commit to a loan. This helps avoid surprises at closing.
Need expert guidance?
Don't navigate the buying process alone. Connect with a verified expert to help you find and close the right deal.
