Lender taking annual personal credit reports on commercial loan!

[Scott Price]

Hi, I just ran into an unusual situation and was wondering what experience others have.  I have had multiple commercial loans over the years, and many now require a fresh set of financial statements, rent rolls, etc. every year.  That is understood and not a problem.  However, a new lender for me just initiated its first annual loan inspection process and, without my advance knowledge, they pulled "hard" personal credit reports on both me and my wife.  Personal credit reports were expected at the time of initial loan application, but they are now telling me they are going to do this every single year from here on out  since this is their policy for all their commercial loans.

This policy is rather disturbing on a number of levels.  Most importantly, hard credit report pulls reduce personal credit scores.  So, if this lender's policy were replicated by other lenders, the negative effect on commercial investors with multiple loans would be significant.

And a bit galling is the fact that this is a flawlessly performing loan with always on time payments, plus of course this is a commercial loan through a LLC and against the property and LLC (with personal guarantee as backup). Their intrusiveness on the personal side appears unwarranted, non-standard, and is detrimental to their clients' personal credit scores (especially for a fully performing loan).

Any thoughts or experiences on this from other investors who have commercial loans?

Thank you,

Scott