Are lenders putting clients under too much pressure to refinance?
A lot has changed in the commercial lending market over the last few months. We have seen record rises in interest rates – and lenders have had to quickly change and update their criteria to respond to the changing landscape.
One knock-on effect of this has been an increase in the number of lenders who either don’t want to renew existing deals that they have with their clients, or are even actively trying to force their clients to refinance.
One local ASC office has seen two clients in the last week, who were both being put under a lot of pressure to refinance their current loans with their lenders. Both were left feeling distressed, as they were unsure on how to refinance their current loans, and felt that they we being pushed very forcefully to find a quick (and therefore not necessarily a suitable) alternative solution.
Luckily, both are now in the hands of their local director who is in the process of finding finance which is right for them. And whilst lenders should be under no obligation to renew loans, they should have a duty of care to their existing clients to inform, and communicate their preferences to them in a way which does not cause distress to the client.
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