Great question. As my attorney says of loan sales, "it's not exactly rocket surgery." Plus there has never at any time in history been more capital available for the purchase of distressed debt. Problem banks with problem loans now make the headlines in newspapers every day. Bankers are inundated with calls from ...
... prospective loan buyers or "vultures" as my banker friends call them.
So who does need a loan advisor?
- Not banks that are unconcerned about creating an arms length transaction;
- Not sellers that personally know several hundred qualified buyers;
- Not banks with workout departments experienced in file assimilation for due diligence; conversion of paper files to electronic files; development of relevant loan data spreadsheets;
- Not sellers with special asset departments prepared to obtain confidentiality statements from scores of curious potential bidders; with sufficient staff to police the actions of those people receiving such confidential information; with the ability to evaluate and understand indicative bids, letters of intent, loan sale agreements, buy back provisions, eleventh hour re-trading and closing documents;
- Not banks that have executive staff well versed in dealing with sophisticated loan buyers that have been involved in hundreds of millions, if not billions of dollars, in previous loan purchases;
- Not lenders that don't have to answer to a board of directors regarding lender liability; did we get a "fair" price, much less the "best" price; do we have ongoing liability; who is this company or person that is now out collecting, or trying to collect, on our documents with our bank name plastered all over them;
- And certainly not banks with a proven, written business plan in place of how they will price loans, market them efficiently, sell them without recourse and maximize their collection efforts.
Come to think of it "who needs a loan sale advisor?"