Can Commercial Property Mortgages Be Modified?

A financial setback in business usually means more restructuring is needed than when an individual faces a financial crisis. Companies typically restructure by cutting costs, and the first place they start is with people. When layoffs or reduced hours do not bring the bottom line up to a healthy level, it is time for a business to look at other options to get out of financial trouble. If the company is like most, it does not own the building it operates out of, but rather is making mortgage payments to a lender. So a good place thing for a struggling company to do is to talk with their lender about modifying the mortgage on the building.

Here are some special considerations business owners should take into account when looking to restructure their finances by including a modification of the mortgage:

•         Talk to a qualified debt management attorney first. Legal representation when you are trying to get your business back on track is a must. There are issues outside of the finances that will have to be handled, and you will want to be sure you are operating within legal boundaries.

•         Have your mortgage and other financial documents analyzed for the legal ability to modify the mortgage. Not every commercial mortgage will have a provision that allows for this type of request, and it is good to know what you are up against at the outset.

•         Come up with a reasonable budget, one that includes operating expenses for things other than the mortgage payment. You will still need to be able to pay your vendors, suppliers, and employees. When you seek a modification, seek one that lets you continue to meet your other business related obligations.

Running a business is hard work, and it gets harder when the economy is not on your side. If your company is struggling to make ends meet, call our office for help. We will look at your operating plan and budget, and help you plan for immediate relief, as well as for your future operations. We understand the needs of small and large businesses, and can give you the legal assistance you need to keep afloat and prosper.

For help with asking for a mortgage modification on a commercial property, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.