Borrowers and lenders should always look to hire the most qualified third-party loan agent. Before hiring an agent, learn why they are vital to the process and what questions to ask.
#1 Expertise in Administering Loans
Third-party loan agents are experts in administering loans.
- Third-party loan agents have experienced staff that understand credit administration.
- They have staff whose sole focus is the administrative functions of loan credits.
- Third-party loan agents have experience handling all types of loan transactions, across a wide variety of industries, from investment grade to distressed debt.
#2 Superior Systems and Controls — Loan Servicing and Tracking
- Third-party loan agents will use a top-level software system to ensure accuracy, promptly distribute communications, monitor activity, and historically track the loan.
- They use a dual control system to ensure transactions are set up correctly, cash distributions are made correctly and prevent fraud.
#3 Independent and Conflict-Free Loan Agent
- A third-party loan agent is independent, impartial, and free of conflicts of interest.
- As a non-lender, the third-party agent's focus is administering the loan, freeing the lenders to focus on lending.
#4 Loan Administrator that Follows the Loan Terms
- The job of a third-party loan agent is to follow the terms of the loan agreement and if discretion is required, to follow the direction of the lenders.
- A third-party loan agent's role is administrative.
- They facilitate communication and transfer funds among the parties.
#5 Security Tracking and Storage
- Third-party loan agents track the security pledged to the lenders.
- They securely store physical security pledged by the borrower.
Questions to ask before hiring a loan agent:
- How are clients' needs met?
- What, if any, specialized services does the third-party loan agent offer?
- What is the turnaround time for inquiries, payments, notices, audit confirmations, and returning phone calls?
- How do you ensure deal information is accurate and correct?
Learn what to expect when partnering with a third-party loan agent in our article, "5 Steps to Close Your Next Deal with an Independent Administrative Agent or Facility Agent."
Jennifer is a Senior Director with the Loan Agency team. Based in Delaware, Jennifer manages a team of Relationship Managers and a portfolio of deals.
Before joining SRS Acquiom, Jennifer was a Relationship Manager within a corporate trust group, working on loan agency and default bankruptcy transactions. Jennifer started out her corporate career in Human Resources where she worked for AIG and Wilmington Trust before taking a leap into corporate trust. Jennifer has over 15 years of experience in corporate trust.
Jennifer is a member of the LSTA and the American Bankruptcy Institute. She holds a B.S. from Wilmington University in Delaware.