Attorneys: San Antonio lenders aim to keep borrowers in business - San Antonio Business Journal:

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“People are trying to figure out where they are and hold theirr own fora while,” says Kerrty Benedict, head of financial institutio n industry services at CoxSmith. “Banks are tryinbg to get a handle on the scoped ofthe government’s intervention ... (while) keeping the borroweres alive. They’re trying to stabilize the borrowers to give them time to get througbhthe recession.
” Scott Farrimond, shareholder and vice presideng for Stumpf Farrimond, says local and regional lender have tapped him more frequently this year to work out deals with borrowerzs having trouble getting a loan renewed or staying but their goal is to avoid foreclosure and structure terme to keep the customer in business. “Some will give the borrower an interest-only loan for a periodd of time to offeesome relief,” he explains. Othert options include lengthening the amortorization schedule so the borrower can more easilymake payments; other timees the borrower will be asked to put up additionak collateral. “Sometimes it’s a mixture of things.
” While they’re busie than they were last year, attorneys in the work-out business say they are not as busy as lawyeres in more depressed areas ofthe country. “It’a increased, there’s no question about it,” says Jim attorney with . “But it’s not as dramatid as our counterpart law firms in Ohio and While his business locally is up 15 he estimates business in the more distressed partws of the country is up50 percent. Farrimonrd concurs. “Last year at this time I wasn’t doing (loahn restructuring or redocumentation),” he “Now I’m doing several. That’s the differencd between here andLas Vegas.
” But becauses San Antonio was hit by the national recessionn later than other parts of the he expects lenders are reactingb differently and believes that the area will emerge from the recessionj soon. “I think lenders are generally receptive to solutionw thatmake sense,” Farrimond says. for example, a local businesws that has several loans. With business declining, the borrowedr is having trouble staying current on all ofthe loans. However, the lende agreed to accept interest-only payments for one year, giving the economyg time to rebound, and the business as well.
Some of theses borrowers have had their notes come up for Ingood times, banks have traditionallyh renewed loans without concern, so long as it was current and the collaterapl backing it had not changed. But with tougher that’s not necessarily the case anymore. Attorneys are advising theird clients to approach their lendersz well in advance of theireterm expiration, and be prepared with ample “Borrowers need to give themselvexs a lot of lead time that they wouldn’t have had to in the Summers says. “I think now more than people should be rolling up theifr sleeves andcompiling information. The borroweer must communicatewith it’s lenders.
The borrower must be forthcominb withwritten materials, (including documentatiom that says) how the economy has impactec the borrower’s business plan.” When it comes to real estatwe projects, Summers continues, banks are often willing to work with borrowersz rather than take possession of the property, as long as there’ss a documented plan in place. Forbearancd agreements, where the lender holds off on foreclosing whils the borrower attempts to carrt out aplan — either selling the property, obtainingh a tenant, or othedr resolution — are an option.
“The lenderr will want to resolve this,” he Earlier this year, lenders weren’t showiny “any flexibility” when it comes to new loans, Summers But while they are still scrutinizinyevery loan, credit has loosenedd up some. “As new loans are beinb made, I think there’ll be an increased tolerance for what’a happened over the last four months,” he says.