What to Look for in a Commercial Lease Servicing Provider

Published On : 09/19/2024

As competition intensifies in the corporate and commercial lending space, lending institutions recognize their need for support in managing commercial loans and leases to meet growing demands for service, compliance, and performance.

This should come as no surprise, given the shifting market forces that are reshaping the competitive landscape for lenders and sizable opportunities:

• Rising M&A Activity
  The transaction value of the M&A market is predicted to reach $2.69 trillion in the U.S. in 2024.
• Competition with Digital Lenders
  The estimated global market size of neobanks doubled between 2021 and 2023, increasing from $47 billion to $96 billion. This is expected to reach $2.05 trillion in 2030.
• Growing Operating Expenditures
  Deeper investment in capital projects and infrastructure development has increased expenses across the board. By 2027, global digital transformation spending is forecast to reach 3.9 trillion U.S. dollars.

Together, the expanding opportunities in the digital space and rising demands have put the spotlight squarely on capable commercial loan and lease servicing organizations, which are poised to play a crucial role in the months and years ahead. The key for lessors is to know what to look for in a commercial lease servicing partner. Here are a few key attributes that should be high on your list:

Experience

Servicing and managing commercial loans and leases demand navigating complex processes, stringent compliance, and rigorous accounting and reporting requirements. It is a challenging task, so ensure your servicing partner has extensive experience, proven leadership, a bulletproof history of meeting compliance and security standards, expert tax management and strong relationships with commercial finance and leasing companies.

Deep Capabilities

Look for an experienced partner who can service all your assets throughout the portfolio lifecycle – across a variety of asset classes and product types – AND handle the most critical support needs for lessors, including:

• Lease management
• UCC filings
• Insurance claims
• Repossession/remarketing
• Invoicing and accounting
• Tax management
• End of term

Compliance Acumen

The ability to navigate fast-evolving compliance mandates is critical for any servicing vendor, as your business depends on it. Compliance in the financial industry provides stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats.

Tax Management

Having a close understanding of the varying sales, use, and property tax considerations is crucial when servicing portfolios, both large and small. Effective risk and exposure management directly impacts your bottom line. Ensure your servicing vendor stays updated on changing tax laws across all jurisdictions and has the expertise to handle remittance, renditions, apportioning, reporting, and bill-back files accurately to keep your business moving forward.

Accounting & Reporting

In the current environment of heightened compliance mandates, diligently following detailed accounting practices, and maintaining precise documentation is a must for any servicing partner. This serves to protect you – the client – in the event of an audit, tax investigation, or compliance investigation.

Advanced Technology & AI 

How your partner uses and manages progressive technology like artificial intelligence is a key contributor in driving positive interactions with your customers acting as an extension of your brand . AI should be used primarily to enhance customer service, compliance and improve portfolio performance. Servicers can leverage AI to analyze valuable customer interactions to support agent training, foster agent development, and add a layer of transparency with clients via call listening sessions.

The Intangibles

When choosing a servicing partner their business philosophy and operational integrity are crucial. Ensure your partner excels in performance, service, and upholds the highest standards of integrity and accountability. Not only will your service partner reflect on your bottom line, but also significantly impact your brand and reputation.

Vervent expertly manages billions in assets – across diverse asset classes and product types – with unmatched precision and speed. Boasting a 99.5% uptime and 85% of calls answered in under 20 seconds, we have spent years developing proven commercial leasing processes to handle the nuances of the accounting, reporting, collateral, insurance, and tax components so you don’t have to.

To discuss how Vervent can help accelerate your business, please call 888.486.2509 or email at Solutions@Vervent.com.

Jessica Weisman-Pitts

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.