Where Lending Deals Get Stuck

Commercial lending friction rarely comes from one dramatic breakdown. More often, it shows up in smaller places: a deal that never fit the bank’s strategy, data sitting in different systems, a credit memo that sends committee members hunting for the same information, or a monitoring signal that arrives too late to be useful. 

Blake Coules, senior director and commercial real estate industry practice lead at Moody’s, said those pain points matter more in a market shaped by economic uncertainty, regulatory pressure, margin compression, and competition from private credit and fintechs. Banks still need strong due diligence. The goal, he stressed, is to remove the waste that slows good decisions. 

Coules pointed to a few areas that deserve attention: 

Set the boundaries before the deal arrives. Coules said friction often starts when strategy, risk appetite, and credit limits are not clearly articulated. Relationship managers need to know what the bank wants, what it will avoid, and where it has limits. That helps teams get to a quick no when a deal does not fit—and gives them more confidence when a deal does. 

Make the data common. Many institutions still rely on multiple systems, applications, spreadsheets, documents, and databases. That creates unhelpful debates when the relationship team and credit team are working from different sources. As Coules put it, the question becomes, “who’s right, and why aren’t we consuming from the same place?” 

Create visibility across the process. Without a clear view of where a deal sits, which team owns the next step, and how long it has been waiting, bottlenecks turn into finger-pointing. Coules compared the handoff-heavy process to a game of telephone: information can be missed, reshaped, or misunderstood before it reaches the approver. 

Standardize the credit package. Credit committee work slows down when every memo has a different structure. Coules said he has seen packages run 30, 60, or 100 pages, with key sections in different places. A consistent format helps reviewers find what they need and focus on the credit decision. 

Use monitoring as a relationship tool. Covenant testing and portfolio reviews should do more than surface late warnings. Coules said banks should use industry data, borrower performance, and forward-looking signals to start better conversations with clients. A liquidity issue, for example, could point to risk—or to a need for an operating line. 

The takeaway: Better lending continuity starts with clean data, clear strategy, visible handoffs, and consistent process. Coules said the banks that stand out over the next few years will focus on “data, data, data,” walk in lockstep on strategy and risk appetite, and use technology to create capacity for more deals, better monitoring, and stronger client conversations.