When a credit goes sideways, the special assets desk needs one independent answer: restructure, extend, or liquidate — and the evidence to defend whichever it is.
A workout engagement is the firm’s standard analysis rebuilt on current reality. The linked model is reconstructed on actual results rather than projections; the market evidence is re-underwritten to today’s vintage from the same published sources; and the scenario set the situation actually requires is run side by side — rate and term restructures, principal modification, additional collateral, alternative use, and exit. Liquidation analysis is standard, not optional: orderly and forced recovery values, marketing-period assumptions stated, costs of sale enumerated. The deliverable is a determination memorandum a workout officer can carry into committee — and that holds up in the litigation these situations frequently become, prepared by a firm whose independence is documented across 4,000+ engagements.
An independent restructure-extend-liquidate determination with the coverage math, recovery values, and market evidence behind each path — from outside the institution, where the credit file needs it to come from.
Buy-side and sell-side diligence on troubled credits: what the asset can actually service, what it would actually recover, and where the original underwriting diverged from reality.
Court-ready analysis of operating trajectory, value, and feasible paths — with every figure sourced and the methodology stated, supported by senior valuation review under the firm’s MAI-designated advisor.
The honest version of your position: which restructure proposals the numbers genuinely support — the credibility a borrower-prepared projection cannot carry into a workout negotiation.
Fixed fees quoted in advance, never contingent on the determination. Expedited delivery available for situations on a forbearance or sale clock. The determination is independent — engagements seeking a predetermined answer are declined, which is precisely why the answer is worth having.
A workout feasibility engagement begins where a standard pre-closing study ends. The borrower has already drawn funds, the project has operating history, and the question is no longer whether the concept pencils — it is whether the asset, restructured or extended, can service a modified debt load, or whether an orderly disposition produces a better recovery. The scope is therefore backward-looking and forward-looking simultaneously.
Every deliverable is produced in a fully linked Excel workbook with no hardcoded values, so the lender’s credit officer or reviewing agency can stress any single input and watch every ratio recalculate in real time.
Demand analysis for a distressed asset cannot rely on the original feasibility study’s market section. Conditions change, the competitive supply picture shifts, and the original analyst may have been working from sponsor-supplied data. A credible workout study rebuilds the demand case from primary sources.
For income-producing real estate, that means pulling current rent comparables from recorded leases and listing services, auditing actual occupancy at competing properties through site visits and licensing registries where applicable, and reviewing any zoning or entitlement changes that have altered the competitive landscape since the loan closed. For operating businesses, it means examining industry trade-association data, state licensing records, local business-license filings, and — where relevant — utility interconnection queues or permit logs that reveal pipeline supply not yet reflected in vacancy statistics.
Traffic counts, consumer-expenditure data from the Census Bureau, and regional employment figures from the Bureau of Labor Statistics are used to test whether the demand base that justified the original underwriting has grown, contracted, or shifted geographically. Where the asset depends on a single anchor tenant, customer, or contract, the study examines that counterparty’s financial condition and lease or contract term directly. The goal is a demand conclusion the lender can defend to its own examiner — one that rests on verifiable, dated, third-party evidence rather than on the borrower’s representations about future performance.
Coverage ratios in a workout context are highly sensitive to a small number of inputs. Identifying those inputs and testing them rigorously is the analytical core of the engagement. The following assumptions consistently drive the outcome for distressed assets across asset classes:
The analytical standard for a workout study is higher than for an origination study because the lender is already exposed and the reviewing agency — whether SBA, USDA, or a bank examiner — is evaluating whether the institution is managing the credit prudently.
For SBA special-assets situations, the study must address the coverage minimums in SOP 50 10 8 — 1.15 times operating coverage and 1.00 times global coverage — under the restructured scenario, and must document why the restructure produces a better recovery than liquidation. The agency is specifically looking for an independent determination: a study prepared by or at the direction of the borrower does not satisfy that requirement.
USDA engagements under RD Staff Instruction 5001 apply across Business & Industry, Community Facilities, REAP, and Value-Added Producer Grant programs, each with its own collateral and coverage expectations. A workout study must address the specific program’s requirements, not a generic standard.
For conventional lenders, the coverage standard is typically 1.20 times, but the more immediate concern is often the examiner classification — whether the credit can be moved from substandard to watch, or whether the restructure merely extends a loss already embedded in the collateral. The study must address that question directly, with a liquidation-value range that gives the credit officer a defensible floor. Fiduciary duty in every engagement runs to the lender and the reviewing agency, never to the borrower, and no fee is contingent on the finding.
Workout situations operate under time pressure that origination studies do not face. Loan-modification deadlines, forbearance expirations, and examiner review cycles compress the decision window. The engagement process is designed around that reality.
A fixed fee is quoted within one business day of receiving a project description. The fee does not change based on the finding, and it is not contingent on any outcome. Rush delivery is available when the timeline requires it. Standard delivery runs 10 to 15 business days from the date a complete data room is received — meaning all operating statements, rent rolls or revenue records, the existing loan documents, the original appraisal, and any prior feasibility or market studies.
The data room requirement is not a formality. A workout study built on incomplete financials produces a conclusion the lender cannot rely on. The engagement letter specifies exactly what is needed, and the clock does not start until the room is complete.
Upon delivery, the bound narrative report and the fully linked Excel workbook are published to a secure client portal. The financial model stays live: when the lender’s credit officer changes an assumption — a different note rate, a revised rent, a longer ramp period — every ratio and every coverage calculation updates immediately. That capability is particularly valuable in workout situations where the terms of the proposed modification are still being negotiated and multiple scenarios need to be evaluated quickly without commissioning a new study for each iteration.
The fee is fixed and quoted within one business day of receiving a project description. It does not vary based on the finding, and no portion is contingent on any outcome. Because workout situations often involve compressed timelines, rush delivery is available and priced at the time of the quote. Contact the firm with a brief project description to receive a specific number.
Standard delivery is 10 to 15 business days from receipt of a complete data room. The data room must include operating statements, rent rolls or revenue records, existing loan documents, the original appraisal, and any prior feasibility studies. The clock starts when the room is complete, not when the engagement letter is signed. Rush delivery is available when forbearance or modification deadlines require it.
The central difficulty is separating normalized operating performance from the distortions caused by the distress itself — deferred maintenance, below-market rents granted to retain tenants, owner compensation that will not transfer to a new operator, and revenue recorded from related-party transactions. A credible study rebuilds each line item from current market evidence rather than accepting the borrower’s adjusted figures at face value.
Studies are prepared to the applicable program standard — SOP 50 10 8 for SBA engagements, RD Staff Instruction 5001 for USDA programs including Business & Industry, Community Facilities, REAP, and Value-Added Producer Grant. The study addresses the specific coverage minimums and documentation requirements of the program. Whether any agency accepts a particular study is the agency’s determination, not the firm’s.
Market value assumes a willing buyer and a reasonable marketing period. Liquidation value reflects the net proceeds realistically available under the time constraints and disposition conditions the lender actually faces — after broker commissions, carrying costs, environmental contingencies, and any title or lien resolution costs. The gap between the two figures is often the decisive input in a restructure-versus-liquidate analysis.
The study presents a restructure-extend-liquidate decision matrix with coverage ratios and net recovery estimates calculated under each path, along with an explicit statement of the conditions each path requires to remain viable. The credit decision remains with the lender. The study provides the independent analytical foundation for that decision — it does not make the decision, and the finding is never revised under pressure from the borrower or any other party.
Legal disclosure. Wert-Berater, Inc. offices are mailing addresses only. Following the COVID-19 pandemic the firm has elected to work remotely; its office locations receive mail and are not staffed for visitors or in-person meetings. Headquarters mailing address: 1968 South Coast Hwy, Ste 2382, Laguna Beach, CA 92651.
Wert-Berater, Inc. is an independent provider of feasibility studies and other related services. The firm does not provide financing or equity investment advice, and does not arrange, broker, or place debt or equity capital of any kind.
All appraisal assignments are performed by Bruce E. Jones, MAI, ASA-GC, BCA, CMEA, a member of the Appraisal Institute since 2006, a staff member of Wert-Berater, Inc. and owner of Special Purpose Realty Valuation.