What it is
"The box" is shorthand for the deals a lender is set up to do. A deal "in the box" fits the lender's criteria. A deal "outside the box" doesn't, and no amount of packaging will change that. Knowing each lender's real box is most of the job of placing debt.
What defines a box
Most lenders define their box on some combination of the following:
| Criterion | Example of a limit |
|---|---|
| Loan size | $5 million to $50 million |
| Asset class | Multifamily and industrial only |
| Geography | Specific states, metros, or primary markets only |
| Loan type | Bridge, construction, permanent |
| Leverage | Maximum LTV or LTC |
| Coverage | Minimum DSCR or debt yield |
| Sponsor | Minimum net worth, liquidity, experience with the asset type |
| Structure | Recourse requirements, rate type, term |
The examples are illustrative. Every lender's box is different, and boxes move. A bank that was active in office last year may be out of it now. A debt fund may widen its geography after raising new capital.
Hard fails and soft misses
Not every criterion is equal.
- Hard fails are limits the lender won't break: a loan below its minimum size, an asset class it doesn't lend on, a state it doesn't operate in. Sending these deals wastes everyone's time.
- Soft misses are close calls: a DSCR of 1.22x against a 1.25x guideline, a sponsor slightly short on experience. A strong deal or relationship can sometimes get through.
Good matching separates the two. A ranked list that mixes hard fails in with real prospects leads to a lot of emails that go nowhere.
Why the published box isn't the real box
Lender websites and directories often list wide criteria. The real box is narrower and lives in recent term sheets, conversations with originators and deals they've actually closed. Brokers build this knowledge over years, and it goes stale quickly.
Common mistakes
- Spraying the deal. Sending a package to forty lenders without checking fit burns relationships.
- Relying on old information. A lender's box from eighteen months ago may not exist today.
- Ignoring sponsor requirements. A deal can fit on every property metric and still fail on the sponsor's liquidity or net worth.
How Dori uses it
Dori keeps a profile of each lender's box and scores every deal against all of them in lender matching. Soft misses stay in the ranked list. Hard fails are surfaced separately, so you only send packages to lenders who could fund the deal. For how the rest of the process fits together, see how to package a commercial real estate loan.