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6 Ways to Mitigate Loan Risk

There are a lot of levers you can pull to mitigate risk, including changing terms to offset the risk of a loan. Risk tolerance is less about a number and more about how you feel sleeping at night knowing the loan is out there. But remember, when you change loan parameters, you will need to consider how doing so might affect other areas of the project. Pulling one lever impacts other places.

Here are six levers you can push or pull to mitigate the risk of a loan, depending on the loan situation and your risk tolerance with the loan.

  • Loan to value

  • Narrowing criteria for property

  • Capital reserves

  • Personal Guarantees

  • Length of loan changes

  • Lowering property valuations

To read the full article, click the link here:

By Alex Breshears

Private Lender, The Official Magazine of AAPL

Spring 2022 (Q2), p.28-31

Published on April 22, 2022

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