A commercial property is more involved than a residential home. There are more moving parts and the process of restructuring a commercial loan is a bit more involved.
However, the concepts are still the same. If you don’t make enough money now, at what level will you be able to afford payments in the future?
It’s just that the number crunching is more complex.
One thing that figures prominently into the commercial modification process is a business plan. Your mortgagor is going to want details of how the restructuring is going to prove worthy in the long run.
Just as is the case with an individual, you will have to show the property making enough profit to justify the modification.
The bank will ask for details and will want to see hard evidence that (1) your current situation dictates a change and (2) your future situation makes financial sense for both parties.
Documentation Needed
Again, many commercial documents are similar to those requested in the residential process.
Items such as a hardship letter, authorization forms, and bank and mortgage statements will all be requested.
In breaking down expenses and income, you’ll need to provide rent rolls, operational income, an operating expense statement and short term budget. Business tax returns will also be necessary.
Also, as mentioned above, an updated business plan will be necessary.
A professional firm can represent you and present everything as one, clean package to the lender.
The Waiting Game
With a detailed presentation given to the lender, aggressive negotiations are necessary to keep the lender involved and let them know you mean business.
However, it takes patience. Depending on the lender, it could take months to reach an agreement on a restructured deal.You’ll want to prepare yourself mentally for a drawn out process.
Again, you many want to consider professional help to ensure someone is always on top of your file and keeping the negotiations going strong.
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