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How to Deliver Bad News to Your Commercial Borrower

Every commercial mortgage broker wants each of their deals to go off without a hitch. However, there will be times when you have to face telling your client that things won’t be going as smoothly as you’d hoped. Perhaps the rate is much higher than your client anticipated, or maybe there are other unfavorable terms. Worse still, the lender could have turned them down. How you inform your client about these situations can either salvage the relationship and the deal, or it can ensure that this commercial borrower never does business with you again.

Here’s how to deliver bad news to a commercial borrower:

  • Understand the reasons. If the lender gives you bad news – say, you’re borrower has been turned down – you need to understand why. Discuss the reasons for the turndown with the lender so that you can explain the situation clearly to your borrower. Fully understanding the reasons will also help you to begin formulating a solution.
  • Don’t delay. No one likes to be the bearer of bad news, but you shouldn’t procrastinate. Tell your borrower about any obstacles or issues as soon as possible. Waiting to tell your borrower will only make the situation more difficult.
  • Choose the right form of communication. Generally, delivering bad news face-to-face is your best option since it’s easier to explain the issues in person. However, if this isn’t possible, call your borrower. An email is impersonal, and you’ll give your client the impression that you’re avoiding them. If you can’t reach your borrower right away, leave a voicemail explaining the bad news, and then follow up with an email.
  • Be direct. If you’re delivering bad news to a commercial borrower, be straightforward. Don’t beat around the bush; the sooner your borrower understands the situation, the sooner the two of you can begin to figure out a solution.
  • Review what you promised. Any bad news might be tougher to break if you’ve over promised what you can do for your borrower. It’s important to be honest with them from the beginning and let them know you will find them the best commercial mortgage possible.

Breaking bad news to your clients is never easy, but conveying the news promptly, clearly and effectively can save both the relationship and the deal. It’s important to present your commercial borrowers with options once you’ve delivered the bad news, so be sure to have a plan going forward and to discuss this plan in detail. Once you’ve communicated any problems and brainstormed solutions, you and your borrower can get back to the business of getting a deal done.

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