You’re right – way too much!
Consider this brief hypothetical conversation between two friends:
Bob – Carol, I heard you changed lenders recently. How come?
Carol – We had to; ah, more to the point, we were forced to.
Bob – That sounds more than annoying.
Carol – Actually, yes, but I have no one to blame but myself. Not too long ago, I made the difficult decision to accept an offer from a lender that came recommended by advisors I respect.
Bob – It’s nice to have a recommendation. I assume you talked to lots of lenders.
Carol – Oh yes, plenty, probably too many. It was very time consuming. Bob – On what did you base your decision? Carol – Well, their representative and I hit it off well, but mainly they offered the best structure for our needs at the time, and they were the cheapest. Bob – Nothing wrong with that, Carol. Carol – You’d think so, Bob, but I should have been a lot more thoughtful. Here I was taking on a lender for the long term that would provide the working capital I needed to realize my ambitions, but my decision to go with them was based purely on the short-term attraction of their offer. Bob – What else is there to consider? Carol – The long-term relationship, Bob. How was I to know what my business would need as circumstances in the market evolved over time? When they did change, I discovered my lender was either uninterested or incapable of adapting to my changing needs. It was devastating. I explained why their reaction would clearly hurt our business and they explained why they could not accommodate. Reasons I heard included I was or would be the wrong size exposure for them and they were not that familiar with my industry. Ok, but why then did they take me on in the first place? I bristled and wasn’t sure I should blame them or myself. Looking back, I realize I should have checked them out more thoroughly. At the very least, I should have sought access to some professional advice. I have now received great professional advice and am confident my new lender is much more compatible. Bob – Carol, I’m so happy you survived that ordeal and hope you are now back on track. Carol – It was costly to change considering legal fees, lender due diligence fees, and the time spent by me and my management team. But we had to do it. And, yes, we are finally back on track.
Regretfully, this scenario plays out too often in the real word. Capital Access Partners exists so that responsible borrowers may avoid being forced to change lenders when their circumstances change. At Capital Access Partners, we firmly believe that businesses seeking capital of any kind should pay maximum attention to compatibility with their capital providers. Optimal Pairing™ = Optimal Results.
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