Negotiate Bank Fees on a Debt Restructure

In this week's Financial Forum, Mike Farley of EquipOne explains that while most lenders charge fees for debt restructure, they are not set in stone.

Most of our banks will charge some type of fees on doing a debt restructure. But, let me be clear - they are very negotiable.

The highest fees we see from one particular big lender is a 1% documents fee and a 1% increase in the interest rates, but again, this is on the high side. Most lenders just charge a documents fee, known in the banking industry as a "docs fee." This can range from several hundred to several thousand dollars.

Some banks will have legal fees which are, quite frankly, all over the board. Most of our lenders will try and get all or some of the past-due interest paid prior to the restructure, or as part of the restructure. Once you have cut the best deal you can on the fees, it is not uncommon for the lenders to give you terms to pay the fees out, but usually not more than 12 months. Occasionally, they will build the fees into the debt, but most lenders will not do this.

Always remember: Bank fees are negotiable.

Questions or comments? Contact Mike Farley at [email protected].