Chicago Commercial Finance partner Derek Ladgenski spoke to S&P Global about how lenders are adjusting loan terms and their approach to underwriting to address the changing reality and uncertainty brought on by the COVID-19 pandemic.
In response to that economic uncertainty, many lenders are becoming more conservative and tightening their standards for issuing financing terms, and while the general volume of new debt issuances have declined, financing deals are still getting done in the marketplace.
According to Derek, leverage is getting "tucked in," required equity contributions are increasing "pretty substantially," pricing has ticked up and there is general tightening in legal terms.
"Everyone is tucking in a little bit, but in terms of wholesale recalibration on truly competitive deals, a good deal is still a good deal, and lenders are going to make educated, sophisticated decisions," Derek explained.
Read “Bankers showing ‘tough love’ in commercial lending amid COVID-19 uncertainty,” in its entirety.
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