Now more than ever we are seeing applicants who have been
transferred to the “special assets department’ of their bank.
Please be cautioned, “Special Assets” is NOT “special” in a good way!!!
The first communication will generally sound like “the bank
no longer wants your business.
Please pay us off a soon as possible.”
The entrepreneur’s natural reaction is surprise and
disbelief. After all, for years,
bankers have been courting him; tell him they want his
‘relationship’. And,
after all, he chose to go with this bank. How dare they jilt him this way?
Not only is it emotionally debilitating, but it may have serious
ramifications for the company.
We are seeing not only operating companies but also real estate
investment (residential and commercial) loans being transferred into special
assets, and very few transfers arise from a payment default:
Common scenarios that we see will cause a transfer include:
What the business owner must understand, and the sooner the better,
is to take this turn of events seriously!
If your loan is with a big bank, the special assets officer can be
characterized like a Roman lion, hungry for fresh meat (and you’re
it). They have been honing their
skills of how to get rid of you as fast as possible and they are very good at
it. They haven’t had a lot to
do the past few years, so they’re really anxious to apply their talents
on you.
If your bank is taken over by the FDIC, and your loan will likely
be sold on the secondary market, and you will have little or no communication
during the process….and then well…who knows, but its never good!
Sadly, this need to refinance generally comes when the business is
least likely to be attractive to another conventional lender aka bank. This is where Corporate Funding can
help. We have lenders that we utilize
to refinance bank loans that don’t have the same credit requirements.
We have been successful in finding replacement financing for many
of the special asset “exit” opportunities presented to us. Not always can we come to the table with
100% financing or even new financing, which an entrepreneur may need to effect
a turnaround of his business.
But in all cases the ....facts matter. We won’t take on a project until
we understand the facts and believe the project can be successfully completed.
Contact us today if you have been assigned to “special
assets”…the sooner the better, and let us try to resolve it in your
favor….not the lenders.