Prior to closing a loan facility, New York Private Finance must engage an independent appraisal agent to confirm values for specified collateral assets. This is a function of bank regulation and not merely a preference of NYPF. However, although our credit process depends in part on the value of the assets pledged as collateral, the purpose of the appraisal goes beyond the mere confirmation of collateral values.
As a standard aspect of our unique structure, NYPF attaches the Participating Interest feature to certain collateral assets. In negotiating the precise structure of our Participating Interest, we come to a mutual agreement with our client as to the current and projected values of the relevant collateral assets. An independent appraisal then provides reassurance / confirmation for our client as to the negotiated value on which we base Participating Interest. The Team at NYPF brings decades of experience in commercial banking, private banking, and investment banking to the process, so it is perhaps no surprise that the independent appraisal valuation typically comes in very close to the one derived in negotiation with our clients. Nonetheless, the involvement of an independent appraiser ensures that our clients may trust the work we have done and the conclusions we have reached.
The appraisal is a standard part of the underwriting process and takes place at the same time as summary due diligence and final documentation. Accordingly, it does not impede the closing or delay funding. Furthermore, our long-standing relationship with the appraisal firm ensures that they understand our process and their role within it. The appraisal is a seamless part of an underwriting that provides comfort to the client that the proposed transaction is both reasonable and fair.
Please contact us to learn how we can help.
