It starts small. A missed payment here, a delayed payment there. Financial statements aren’t prepared on time. Checks written before deposits are there to cover them. Or a loan maturity has been approaching like a train barreling down the tracks and you feel like you can’t get out of the way. The value of your property is less than the loan balance. You may fear being served a lawsuit summons at your home by a sheriff's deputy or you might have been served already. You are being sued as the guarantor. Everything is on the line. Don't delay any further. Act quickly to get out in front of the problem. Get a professional on your side.
We can help
Whether seeking expansion capital, restructuring or working out of a troubled situation, our access to capital providers and our proprietary process bring the right solutions at the right time for your business.
Most lenders want to resolve a problem loan as much as you do. They need to hear from you how you plan to reinvent your enterprise, your game plan.
We perform two analyses – we analyze all aspects of your project and we analyze the lender. Why the lender? Because each lender has its own personality depending on how (and if) it is regulated, its sources and costs of capital, its loss experience, their current portfolio of performing and non-performing assets, the experience and sophistication of its staff and systems and many other factors. We ask you about your desired outcome and other acceptable outcomes, advising you of the likelihood of success based on the unique conditions of your case.
Funding / Capital
To achieve a successful outcome, the sources and uses of capital must be mapped out and must equal each other. Funding gaps must be covered. If your loan is a workout, new capital commitments need to be obtained. Through our network of capital providers, Vertical Capital Advisors will assist in obtaining the required capital whether it is senior debt, junior / subordinated / mezzanine debt or equity. When it comes to the next step, presenting your proposal to the current noteholder, the words of the great 20th century philosopher, Danny DeVito, apply: “Money talks and BS walks”. Demonstrating that the proposed deal has sufficient funds to close is a powerful motivator.
We negotiate in a collaborative manner, not confrontational. One important factor is our direct experience with your lender. We have experience with many lenders and a reputation for integrity that allows us to quickly resolve your loan. Whether we have worked with your lender or not, our professional approach and reputation provide the optimal platform for efficient resolution of your loan.
A verbal agreement is a good start but a deal is not final until it is signed by all parties and money changes hands. We carefully negotiate the terms of any written agreements, ensure all parties properly prepare for the closing and see the transaction through to closing.
You are the ultimate decision-maker and you retain the ability to direct the entire process from beginning to end to the degree you choose to. While no one can guarantee a particular outcome, through hundreds of transactions we have continually improved our process to provide the optimal conditions for approval of your proposal on the terms you desire.
Examples of loan modifications/restructuring include:
- Interest-only period
- Reduced interest rate
- Transaction advisory
- Recast principal and interest (P+I) payments
- Maturity date extension
- A/B Note Split
- Release of Guaranty
- Principal reduction
- Discounted Payoff (DPO)
We strive to effect these changes without a forbearance agreement which typically forces borrowers to admit default and waive possible defenses and bankruptcy rights among other punitive terms.
- Loan Types Successfully Negotiated:
- Office $2 million to $50 million
- Retail $1 million to $50+ million
- Industrial $1 million to $25 million
- Hotel / Hospitality / Resort $2 million to $65 million
- Development $1 million to $100 million
Level the playing field
When a lender decides your loan must exit their organization it is called a workout - they are working you out the door. You can expect things to get rough. The cordial relationship and years without missing a payment become instant memories and your lender holds all the cards. You owe the money and you can't repay it as scheduled.
You are now the opponent.
We can still help.
Successful results we have achieved for our clients include:
- Reamortization/Payment Recast
- Reduction of principal
- A/B Note Split
- Lower Interest Rate
- Release of guaranties
In all cases, a workout is successful only when personal guaranties are extinguished which we include as a condition in all of our negotiations.
Negotiated workouts where the property was refinanced or sold:
- Discounted Payoff (DPO) - most common outcome
- Deed in Lieu of Foreclosure (Cooperative Foreclosure)
- Short Sale