Synovus Bank Subordination Agreement

Synovus Bank Subordination Agreement: Everything You Need to Know

When it comes to commercial real estate financing, subordination agreements are an essential component of the process. These agreements allow a lender to maintain their priority position even in situations where other lenders might have a claim on the property.

One such subordination agreement is the Synovus Bank subordination agreement. This particular agreement is used when a borrower has multiple loans against the same commercial property.

Let`s take a closer look at what the Synovus Bank subordination agreement entails and why it`s essential for commercial real estate borrowers and lenders.

What is a Subordination Agreement?

A subordination agreement is an agreement between two or more lenders that outlines the priority of their respective claims against a property. When a borrower has multiple loans against a commercial property, each lender will have a priority claim based on the terms of their initial agreement with the borrower.

If the borrower defaults on any of their loans, lenders will need to coordinate their claims to determine who should be paid first. In many cases, the lender that holds the first lien will be able to recover their full loan amount, while other lenders may receive only a portion of their claim.

A subordination agreement is used to formalize the priority of each lender`s claim. It allows a lender to maintain their position as the first lien holder even if other lenders make additional loans against the property.

What is the Synovus Bank Subordination Agreement?

The Synovus Bank subordination agreement is a specific type of subordination agreement used when a borrower has multiple loans against the same commercial property. This agreement allows Synovus Bank to maintain its priority position even if additional loans are made against the property by other lenders.

The agreement typically includes provisions that outline the priority of existing loans and any future loans that may be made against the property. It also establishes the conditions under which Synovus Bank may choose to waive its priority position, such as in the event of a loan modification or refinance.

Why is a Synovus Bank Subordination Agreement Important?

For borrowers, a Synovus Bank subordination agreement can provide the flexibility to make additional loans against their property without risking their existing loan agreements. It can also make it easier to obtain financing from other lenders, as they can be assured that Synovus Bank`s priority position has been formalized.

For lenders, a Synovus Bank subordination agreement can help reduce risk by ensuring that they maintain their priority position in the event of default or bankruptcy. It can also allow them to maintain a relationship with the borrower even if additional loans are made against the property.

In summary, a Synovus Bank subordination agreement is an essential component of commercial real estate financing. It helps ensure that lenders and borrowers can work together effectively, even in situations where multiple loans are involved. If you`re a commercial real estate borrower or lender, it`s important to understand the terms of a Synovus Bank subordination agreement and how it can impact your financing arrangements.