As the corporate and commercial lending marketplace continues to heat up, lending institutions are embracing the fact that – amidst increasing demands for service, compliance and performance – they need help with servicing their commercial loans and leases.
This should come as no surprise, given the shifting market forces that are reshaping the competitive landscape for lenders – AND introducing sizable opportunities:
- Rising M&A Activity
In 2018, the approximate value of Mergers & Acquisitions rose to $4.4 trillion and is expected to continue that trajectory through 2019.
- Large Capital Expenditures
Cumulative capital expenditures are expected to be $27 to $29 trillion heading into 2020.
- Growing Operating Expenditures
Deeper investment in capital projects and infrastructure development has increased expenses across the board.
Together, the expanding opportunities and rising demands have put the spotlight squarely on capable commercial loan and lease servicing organizations, which are poised to play a crucial role in the months and years ahead.
The key for guarantors is to know what to look for in a servicing partner. Here are a few key attributes that should be high on your list:
Servicing and managing commercial loans and leases involves complex processes, sensitive compliance demands, and stringent accounting and reporting requirements. It’s not for the faint of heart, so make sure your servicing partner has deep experience in the space, proven leadership, a bulletproof history of meeting compliance and security standards, expert tax management process, and strong relationships with respected commercial finance and leasing companies.
Look for a proven cradle-to-grave partner who can service all your assets – across a variety of asset classes and product types – AND handle the most critical support needs for guarantors, including:
- Lease management
- UCC filings
- Insurance claims
- Invoicing and accounting
- Tax management
- End of term
The ability to navigate fast-evolving compliance mandates is critical for any servicing vendor, as your business depends on it. Compliance in the financial industry provides stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats.
Having a close understanding of the varying sales, use, and property tax considerations is crucial when servicing portfolios, both large and small. Managing risk and exposure plays a key role in a business’ bottom line, so ask if your servicing vendor keeps a tight focus on ever changing tax laws at all jurisdiction levels and has the necessary systems & know-how to accurately handle remittance, renditions, apportioning, reporting and “bill-back” files to keep your business moving forward.
Accounting & Reporting
In the current environment of heightened Compliance mandates, diligently following detailed accounting practices, and maintaining precise documentation is a must for any servicing partner. This serves to protect you – the client – in the event of an audit, tax investigation, or compliance investigation.
Progressive Technology / AI
Technology has become a key differentiator on a variety of business fronts, from communications platforms that leverage Artificial Intelligence capabilities analyze valuable customer interactions, to PCI (Payment Card Industry) Data Security Standard 3.2 SAQ D compliance certification.
Equally important when selecting a servicing partner are their overall business philosophy and operating fabric. Make sure your partner is bent on excelling in key areas like performance, service, and providing the highest levels of integrity and accountability. Not only will your servicing partner reflect on your bottom line, but they will also have a measurable impact on your brand and reputation.
At Vervent, we service billions in assets – across a variety of asset classes and product types – with precision and speed. We’ve spent years developing proven commercial leasing processes to handle the nuances of the accounting, reporting, collateral, insurance, and tax components so you don’t have to.