Financing is necessary for every business to grow. Your company can fund its expansion by taking out loans from either banks or private hard money lenders. Although taking a loan can give you the extra funding you need to kickstart your business, but there are times when it may not work out. If your business doesn’t do well, it can be challenging for you to repay the loan. Studies show that the estimated total mortgage debt outstanding in the third quarter of 2020 was 16.5 trillion dollars.

In these circumstances, you wouldn’t want to repay a loan to the bank as they are not flexible enough to change the terms. However, if you have taken a loan from a private hard money lender, they can provide you with workout loans to get out of any foreclosure situation. Here’s everything that you need to know about it.

The Basics of a Loan Workout

A loan workout is an agreement between the borrower and the lender as the borrower is incapable of returning the loan with the existing terms. When a borrower faces foreclosure, a loan workout is a way to restructure the agreement to make the repayment successful.

What Terms Can You Change in a Workout Loan?

A loan agreement can have many associated terms. As the lender entrusts you with their money, they would keep these terms to ensure you repay them in a suitable period with interest payments. However, things don’t go your way every time, and you may need to alter the loan terms to ensure loan repayment. A private money lender may offer changes in the following terms:

 

1. Loan Amount: A private money lendercan decrease the payments to be made in the short run and increase them for later when the borrower’s condition is better and more stable
2. Repayment Deadline:The maturity date of the loan can also be changed to provide some flexibility to the borrower.
3. Interest Rates:A private money lender may even cut down interest rates to ensure that repayments are completed.
4. Property Acquisition: Private money lenderscan accept properties as a form of repayment if you are unable to pay even after the terms are changed.

Get Workout Loans Now!

If you’re looking to get out of a foreclosure situation, visit Commercial Private Equity now. We provide effective workout loans, where we try to make the new loan terms easy for you to repay. We have been in this industry as a private money lender for over 75 years and offer four other specialized loans, including commercial hard money, bridge loans, construction loans, and raw land loans. We also provide a loan program with three levels of loan terms.

Contact us now for more information.