An industrial loan modification is a loss mitigation option open to the borrower, an option of last resort. Borrowers in a position to request such an industrial loan modification is typically tied to property that’s underwater; meaning, the property’s worth much, much less than what’s owed on the mortgage. A request to modify will invariably entail a commercial loan forensic audit in which the borrower’s creditworthiness will be reevaluated. The property will also be appraised by the bank in order to gauge the development’s feasibility of making revenue and eventually turning a profit. Documents, such as tenant lease agreements, will be requested in order to be scrutinized.
It’s also important to realize and appreciate the levity of the prudent commercial loan modification, in terms of your business’s creditworthiness. Your business’s credit will go down after the prudent commercial loan Workout, and the bank will consider you a riskier borrower. This could take a toll on your confidence during the industrial loan modifications process. But it’s important that you do maintain your confidence, and that you do press for your concerns while dealing with the bankers and lawyers that will be working on behalf of the bank to restructure the debt. Realize that the bank has a vested interest in seeing you succeed, that the bank would be better off with you seeing through a mortgage—either the original mortgage or a modified mortgage—to full maturity. Banks are booking incredible losses due to defaults and foreclosures, so they’re now taking considerable steps to turn these dire situations around on a case by case basis.
