When Does a Commercial Loan Modification Become Necessary
The reason why many commercial loans have been foreclosed on and many dreams of business ownership have been ended is because business owners did not apply for financial assistance from their lender fast enough. Many borrowers decided to wait as long as they could without filing for assistance through loan modification but waited too long. When it comes to commercial loan modification assistance, the willingness and ability of a lender to offer assistance decreases a little bit more every day.
Many will attribute their unwillingness to seek assistance to simple pride. Business owners are a proud bunch and admitting that they need help is not a trait that comes easy to many. Some see the process of applying for a loan modification as a cop out better suited for the leeches of society. In reality, requesting a loan modification is nothing more than a negotiation with the lender to change the terms of the original mortgage contract so that monthly payments can be lowered. In fact, the borrower will still pay back the original loan amount over time, they will just do it a little slower or with lower interest rates.
A commercial loan modification should be seen as just another business deal by the borrower, because that’s exactly what it is. In any other aspect of business, if the owner had a problem with a contract with any other clients, they would have no problem approaching the client to negotiate and work out a fair solution. If this is the case, then nothing should stop the borrower from approaching their lender to come to a fair solution for their mortgage payment problems.
A business owner should consider a commercial loan modification at the first sight of trouble. In many cases, the first sight of trouble will be plain as day to the borrower, but they will attempt to mask their fear for the sake of their employees, family, or others. While understandable, this can only lead to trouble. Those close to the business owner, especially his or her employees, deserve to know what kind of shape their company is in.
As soon as any payments are missed or as soon as the business owner thinks that any payments will be missed, he or she should secure the services of an experienced foreclosure attorney who can assess the borrower’s actual financial situation and can guide the borrower through the loan modification process at a comfortable speed. Putting off something like a loan modification will only make it that much scarier and that much more uncomfortable later on down the road because the borrower will be forced to rush in order to complete the process.
Attempting to request a commercial loan modification on short notice is a good way to miss important steps or improperly fill out requested application documents. The borrower should reserve enough time to perform the process that will allow for a good document review by their attorney and enough time to fix the documents should the attorney find any problems.