Borrowers, communicate early

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Borrowers, communicate early

Siahna ImBusiness Member
Lender · Lakewood, WA · Member since 2021 · 47 posts · 24 votes

Projects rarely go exactly according to plan.

Budgets change. Timelines change. Scope changes.

Communicating those changes early can help everyone respond before a small issue becomes a major one.

Lenders, what’s the communication mistake you see borrowers make most often?

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    6d

    Forgetting to disclose LLC / borrowing structure.

    You can quote the best terms on a solid deal however if the entity structure is complex or requires an additional PG, it can either kill the deal or change the loan terms.

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    • Siahna ImBusiness Member
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      Lender · Lakewood, WA · Member since 2021 · 47 posts · 24 votes
      6d

      Absolutely. Being upfront about the LLC and borrowing structure from the beginning can help avoid surprises later. Even when the deal itself looks strong, a more complex entity structure or additional personal guarantee can affect the terms and timeline. Clear communication early on helps everyone evaluate the deal properly.

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  • Diana Khan
    Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 296 posts · 111 votes
    5d
    Quote from @Siahna Im:

    Projects rarely go exactly according to plan.

    Budgets change. Timelines change. Scope changes.

    Communicating those changes early can help everyone respond before a small issue becomes a major one.

    Lenders, what’s the communication mistake you see borrowers make most often?

    @Siahna Im, I’m not a lender, but from the legal side, one mistake I see is waiting too long to mention that something changed. It could be a contractor problem, title issue, permit delay, ownership change, or a budget that is starting to move. By the time everyone finds out, the issue is usually harder to fix.

    I’ve found that borrowers sometimes wait because they want to have the whole solution before saying anything. In reality, it is usually better to say, “Here is what changed, here is what we know so far, and here is what we are working on.” That gives everyone more room to adjust before the problem affects a draw, closing, or timeline. I always appreciate lenders who value clear communication because it makes the whole transaction much easier for everyone involved.

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    • Siahna ImBusiness Member
      OP
      Lender · Lakewood, WA · Member since 2021 · 47 posts · 24 votes
      5d

      Absolutely. Clear communication early on can make a big difference, especially when a project starts moving away from the original plan.

      I like your point about not waiting until you have the whole solution before speaking up. Whether it’s a permit delay, contractor issue, or budget change, giving everyone a heads-up early creates more room to work through it.

      From a lender’s perspective, that transparency helps keep expectations aligned and gives everyone a better chance to address issues before they affect the draw or closing timeline.

      Have you found that borrowers tend to communicate more openly about these changes when lenders make it clear that they’re there to help problem-solve, rather than just point out the issue?

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