Tax liens, bankruptcy, tough CBR and many other issue can give brokers big headaches. Many experienced brokers pass on these deals, while newer brokers bang their head against the wall with empty promises of lenders who “say” they can do the deal. As a long time lender to businesses in challenging circumstances, here are three tips that lead to a more straightforward, successful practice.
- Know thy funders. In times like these many funders say they can do more than they can. Or, they are highly inconsistent in their approach. Spending time really getting to know your funder, their programs, consistency and approach is the most important step in the process. Reading the program bullets online is not enough. Really talk to them and understand what they are looking for. Once you have this understanding you can successfully sell into their program.
- Know thy customer. People are often scared to tell you just how bad the situation is. Often, you find out how deep the rabbit hole is AFTER you or your dealer run the CBR. In these situations, you have to put them at ease with the knowledge that many successful business owners have been where they are. Then…ask good questions. Understand the details of all the credit challenges and if things are just too hairy, go to their asset base.
- Know thy assets. Construction, Transportation, Machine Tool. These assets carry strong secondary market value and could open up nice opportunity to fee up working capital for them OR could act as nice additional collateral for the new purchase. The power of a simple debt schedule against their commercial assets could open up opportunity for an asset-based play.
Whether a refinance of equipment to pull out desperately needed working capital or the leveraging cash down/additional equipment for a new purchase, following these basic commandments will help you to success. At Dakota, we help you get your most challenging deals done. Simple, fast and straightforward…every time. Let’s talk.