Commercial Lending And The Different Processes Involved
Commercial lending in general is done on a much larger scale than that of traditional mortgages. With this type of lending there is typically going to be a though rough business plan presented to the potential investor. The lender or investor will look over all of the information presented and base their decision off of that as well as several other factors. Other forms of commercial loan work is that of the loan modifiers. These people go into the bank and help the company change the terms of their loan. This path is typically taken by companies who are finding themselves struggling to make ends meet.
A modifier has several benefits over trying to go in and negotiate with the lender by one's self. They deal with lenders and negotiate current loan terms everyday. They have a much better chance of getting new loan agreements passed through the lender than someone from the struggling company themselves have.
It is not much like a person struggling with their mortgage payment. They have a much better chance of getting their payment reduced if they hire a professional to deal with the bank for them.
In many cases the owner of a company is more likely to go to the lender and try to explain what they plan on doing differently to improve their numbers and in some cases they get emotionally involved. The lenders are usually non responsive to this type of pleading. A negotiator will go in and go over numbers with the bank and try to explain why it is in their best interest to renegotiate. Banks are more likely to respond better to this type of presentation.
A modifier does not always recommend trying to renegotiate with the lender. They typically review the company and decide which route is the best to take. In some cases they will suggest a short sale as an alternative. This usually means loosing the company but it is much better than having to go through bankruptcy and can also help to protect leaders of a company from having their personal property seized as well.
Another thing a modifier can do is help prepare the potential company officials to pitch the company to the lender. They can make sure that the group is ready to go in front of the lender and give them a better chance of getting approved.
Commercial lending resembles individual lending in many ways except it is usually on a much larger scale. People seeking a commercial loan will usually need to be much more prepared as well.
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