Maybe I’m biased, but back when I oversaw a team of workout specialists, I thought I was pretty good at my job. It could be overwhelming at times because of all the files I had to handle. Handling 100+ files can be a tall order for even the most efficient worker, especially when handling those files is only a part of what the workout specialist is responsible for. In my case, I was constantly working on some mundane (and in many cases, pointless) reports that management wanted to see. On average, I’d spend one full week out of every month doing nothing but filling out forms and creating reports. Of course, just because I was working on reports didn’t mean that my 100+ files were going away.
So, what’s the obstacle to SBA Loan Workout that you didn’t expect? It’s simply getting your workout officer to take action on your loan. That can mean getting a response to an email or phone call, pushing them to submit your offer to the SBA, or getting the paperwork you were promised after you make an agreed upon settlement payment.
There are many obstacles that I always knew existed: filling out paperwork, making a fair offer that is reflective of the borrower’s personal finances, and liquidating business assets. But getting someone on the phone was not one that I ever thought about, and honestly, it’s probably the biggest hurdle I encounter these days.
When I was a workout officer, responding to emails and phone calls in a timely fashion was second nature. I had started my career as a commercial lender, so being responsive was part of the job. Now that I’m a consultant, I’ve learned that not all workout people make the borrower a priority. Sadly, I would say that being completely unresponsive is now the rule rather than the exception.
Why are so many workout officers so slow to return calls or respond to settlement offers?
1) Too Much Work, and Not Enough People – At some point, even the best worker reaches the point where they physically cannot move any faster. With the economy being in shambles, many lenders are hesitant to spend money on additional workout staff, and as a result many workout departments are working at 125% capacity. The result is obvious: there is just not enough time in the day to do everything that needs to be done. So if your case is not a high priority, it’s very likely you will be put on the back burner, or worse, completely forgotten.
2) Incompetence – This is true of any profession, not just workout. Some people are just bad at what they do. They ask for paperwork that they don’t need (or worse, lose the paperwork you already gave them), ask questions that have no relevance, and basically find ways to prolong the process and waste everyone’s time. I had a co-worker who spent hours poring over minutia that didn’t matter, so there was no way to get to the stuff that really mattered.
3) You Are Mean, Rude, or Annoying – I don’t know about you, but I tend to avoid people who make my life difficult. Workout people are human, so if you stress them out, they’ll just find a reason to work on another equally important matter.
How To Overcome The Obstacle Of A Non-Responsive Workout Officer
1) Be Persistent – Making sure they don’t forget about you can be the difference between getting something done or being at the bottom of a pile somewhere. And don’t forget, sending an email or calling once a week is persistent. Calling every hour is obnoxious.
2) Be Responsive – It can be annoying to have to rush to get paperwork together in the blink of an eye, especially when they took a month to get back to you, but the bank is the one holding all the cards here, so swallow your pride and do what you can to make their life as easy as possible.
3) Be Polite – In most cases, being respectful and courteous will get you further than saying things like “you got bailed out, so I want to be bailed out. What can your bank do for me?”
4) Keep Records – For the extreme cases of being ignored, you want to have records of calls and emails. That way, if you do need to escalate the issue, you can prove that your lender is ignoring you. Similarly, if you lender says they will get back to you by a certain date, but don’t, and this happens over and over, you will have proof. In many cases, the workout officer’s manager has no idea that borrowers are being ignored and will make sure your file gets looked out if it comes to their attention.
Overall, the workout process can best be described as grueling. Murphy’s Law (the idea that “whatever can go wrong, will go wrong”) almost always applies in SBA workouts. The key is not to take any of it personally, which is admittedly hard to do, which is why so many people seek the help of a good workout consultant. And for those of you who think being forgotten is a good thing, if you just let the problem sit, it will resurface in the hands of the US Treasury. I assure you that trying to settle with the Treasury will be twice as hard, and A LOT more expensive.