Financial institutions regularly deal with troubled loans and managing them can have an adverse effect on regular operations. It can lead to a critical shift in focus, from meeting the banking needs of your existing customers and competing for new customers, to workout mode - where customer relationships and new business generation suffer as resources become stretched. In Artisan’s experience, the workout process doesn’t have to divert your institution from its strategic plan, if you take our two-pronged approach:

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Focus on forbearance
Generally, the workout process is divided into two phases: forbearance and foreclosure.

Forbearance requires establishing the kind of trust and engagement that are necessary for the financial institution and the customer to work together on a solution. Assuming your customer is equally engaged in reaching a resolution, Artisan will lead a process that finds ways to restructure loans, reduce rates or identify additional collateral that will help your customers save their business and save the bank money and time in the long run.

The fact is, everyone loses when forbearance gives way to foreclosure.  Customers lose their business or their property, and often enter bankruptcy proceedings. Banks lose, too. Losses mitigated by resolving the troubled loans are frequently increased by attorney and property management fees, as well as a prolonged asset disposition process.  Artisan’s workout professionals work with clients to produce better outcomes through forbearance.

Staff strategically
Managing loan workouts efficiently is generally going to be beyond the scope and abilities of current lending staff.  For those times when you need extra boots on the ground, Artisan can provide workout specialists with the right skills and experience to navigate and expedite the process. Working with our specialists will ensure a high level of customer service is maintained in your lending department, while best serving the workout needs of your bank.  We have seen that working closely with a borrower to resolve loan issues amicably yields dividends of good will and reputational equity for years to come.

Artisan Advisors is here to review, discuss and assist your institution with workout planning and execution.

 

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