There is a big difference between commercial and consumer loans. Consumer loans are sometimes unsecured, meaning they are not backed by any sort of collateral, like a house or a car that would secure the sum of the loan. On the other hand, construction loans are almost always secured, even though they could be given to companies or individuals wishing to build a home.
Commonly, lenders view borrower’s creditworthiness as one of the deciding factors. Consumer loans usually have much higher interest rates on repayment, sometimes over twenty-five percent. Secured loans, on the other hand, need to be backed by collateral to guarantee that the lender gets the loan amount back, but have lower interest rates and are not necessarily based solely on the creditworthiness.
Why Construction Loans Are Different
Since the specialty is construction, you will be working with construction-oriented loans and will supervise a team of loan officers in the same field. Loan officers are typically the ones to help with applications, but you are the one who oversees the processing and makes the final decision on whether to approve or reject the loan. The officer tries to determine if the deal is profitable and will look to you for guidance. This means that you should understand loan policies, traditional contracts, and even new precedents in the industry.
You also have to set goals for your division, and keep the staff under you motivated. You may be called upon to offer ideas to management or employees on how to improve performance, and this does indicate creative thinking skills and problem-solving skills. For example, some managers find that working with local companies can help generate leads. Others try to establish a strong community presence.
What Training is Necessary?
Training comes in two fields: formal training and skill enhancement. Formal training usually means a college degree, at least a bachelor’s degree in a related field such as business administration or finance. However, there is more emphasis put on construction knowledge and experience because of the specialization. Most banks will hire someone that comes from a construction background and can analyze finance, as well as construction standards and theories.
Since you are not actually a construction worker, but a loan manager, you cannot skimp on social skills. You are expected to have top-notch written and verbal skills and a clear manner of speaking that quickly imparts details to others. Ultimately, you play mediator between the lending company who fronts the money and the borrower, who may have a commercial or personal mission to see through. Make no mistake; running a lending company takes teamwork. You manage the staff and make sure everyone stays productive and that the group dynamic is positive.
If you love construction, and more importantly, want to help people achieve their dreams, then this is a profession for you. You make the deals, you help your loan officers push the loan through, and you ensure the company’s long-term survival. With the proper training, you will be ready for this assignment!