CAN YOU TELL ME WHAT A COMMERCIAL LOAN MODIFICATION IS?

A commercial loan modification is one form of a loan workout that can be negotiated with a bank for an existing commercial loan that is in default or in danger of defaulting. Specifically, it is an addendum to your original loan contract that changes a certain aspect of the contract – usually the rate, terms and/or principle balance, if applicable. The broader term is Commercial Loan Resolution, it is a loan workout that can be either a loan modification, a forbearance agreement, postponement of accruing interest, etc.

DOES IT TAKE LONG?

Commercial Loan Resolutions can take anywhere from 30-90 days, actual times will always vary because the circumstances of each case are very specific. Still, this is a lot quicker than the 120-180 days most banks need to review residential loan workouts.

DID I WAIT TOO LONG?

In most states borrowers have until the actual date the property goes on sale to save their property. In addition, borrowers can still hire a lawyer after the property is auctioned off to see what can be done. However, the best option is to take action as soon as possible because it will obviously be more difficult and cost more as the foreclosure process progresses.

SHOULD I CALL THE BANK MYSELF?

Unless you are familiar with presenting and negotiating loan terms with a bank it is best to get professional help. Just as there are certain injuries you can treat yourself, there are more severe illnesses that should only be treated by a physician. The reason for getting a loan workout is to help you with your current situation; if you qualify for a loan workout, a commercial loan modification company will help save you the most money.

DO I HAVE TO SELL?

In every situation there is always more than one way out as long as you are able to act in time. Borrowers should always take any advice with a grain of salt and seek more than one opinion when it comes to difficult financial decisions. You should also consider the fact that this is an entirely new economic situation, the likes of which have never been seen before so you should not accept any statement about any situation as 100% certainty.

DO I QUALIFY FOR A LOAN MODIFICATION?

These are uncertain times and everyone seems to be looking for a sure thing before jumping in, which is understandable. However, just as beginning a business inherently contains some risk, so does investing in a loan modification company. In both situations the best thing to do is simply plan. Take advantage of free consultations and pre-screening of your specific situation. If a company is unwilling to look over your file without charging you first, they are truly not interested in helping you.

To Learn more about commercial financing, stop by Frank Greenbaum’s site where you can find out all about acommercial loan workout and what it can do for you.