The Business Financing Problem

Many businesses are or will soon be seeking financing for their ongoing operations. There are plenty of lenders very willing to offer resources. Is there a problem here?

I’ve been doing this for a while and have never seen such a multitude of choices for a prospective borrower. It seems that I get notified every few days of another new lending platform being formed by “industry veterans." All of these lenders are doing their best to put their funds to use which has resulted in their acceptance of ever-decreasing yields. Sometimes, I wonder how low their expectations are for a return on capital.

Above, I asked if there was a problem here. You bet there is. A prospective borrower can become bewildered by the myriad of choices available to them and have little insight into which lender is best for their organization. Most lenders I know make a very good first impression on the prospective borrower, but that really doesn’t properly inform the borrower about the practicalities of their future relationship. Time and again, I’ve seen borrowers terribly unhappy with their new lender as circumstances unfold. Most borrowers are well aware of the potential for a sour relationship but don’t have the time to really dig in and investigate whether a certain lender is compatible.

We at Capital Access Partners are firm believers that businesses seeking capital of any kind should pay maximum attention to compatibility with their capital providers. Optimal Pairing™ = Optimal Results.

Losing sleep over sourcing new or replacement capital?

Good for those who aren’t. But many are, either because of immediate growth opportunities or an impending liquidity crisis. For these businesses, the need is increasingly apparent.

I have an important request for those in that situation. Please don’t rush into an arrangement with a capital provider that may not be compatible. It’s critical, in these fast-changing times, that a new capital provider truly understands the industry and the issues a particular business may be facing. This is especially crucial for businesses operating in the lower middle market. Things happen fast there, and capital seekers need to be certain their providers won’t have knee-jerk reactions to a variety of changing situations.

True compatibility with capital providers is far more valuable than ever. A little extra research and effort to find compatible capital providers will provide consistent long-term benefits.

We at Capital Access Partners are firm believers that businesses seeking capital of any kind should pay maximum attention to compatibility with their capital providers. Optimal Pairing™ = Optimal Results.

Let the Other Tom Henderson Do It

Losing sleep over a challenging business matter is depressing. We’ve all done that. I have a suggestion.

Many years ago, I was a young, promising mid-level guy in a very big organization. The powers that be had just promoted me to a very visible level in a unit filled with serious issues that I was expected to help resolve. I didn’t think I was experienced enough to do the job. I panicked and furiously began tackling the issues.

It didn’t seem I was getting anywhere. I was worried sick. I developed ulcers. I awoke every night and agonizingly went over all the issues in my mind hoping to hit on resolutions or even praying they would go away. Would there be a 2:00 AM miracle this time? This was not good. But there was hope.

I finally confided to my doctor – told him my fears and anxieties. He calmly suggested I take a deep breath and come to understand there was a reason I had been given this challenging opportunity. Others in the organization who knew me well had seen me perform as I was coming up the ladder and they had confidence I was up to the task. They had seen me show up every morning and crank out very good results. He told me to understand that truly I was quite competent and that I only lacked confidence.

When I admitted this was true, he made a suggestion. He said there are two Tom Hendersons. One wakes at 2:00 in the morning with his mind racing. That guy should take a deep breath, realize there is nothing he can do about it right now, and make the decision to let the other Tom Henderson do it. That other guy shows up in the morning and gets the job done time and time again. He said I had to trust that guy.

Hmmm, nothing wrong with that thought process. I promised to try it. No immediate breakthrough – old habits do die hard, but several weeks later my ulcerous condition was a lot better and I was sleeping much better too. His suggestion worked and many years later, in times of stress, I still remind myself about the other Tom Henderson.

So, try this when you’re losing sleep. Let the other (your name here) do it.