Home > Uncategorized > Bad banks part two

Bad banks part two

In this particular case I will be referring to a small independent lender. Sad to say, they can, in some instances be pretty hopeless too. I will keep the details brief and identities discreet (although there will be a clue as to who the culprit was)

My client was seeking quick financing on a £1m debt he was due from a cash poor asset rich client. Clearly my role was to find the quickest, most cost effective and reliable option. I had a number of lenders in mind but as is so often the case, the first through the door to sufficiently impress would get the business

I will add at this point that i should have argued more firmly with the client that relying on one lender is not a good idea, whatever the assurances. That was the mistake we made.

Having said all that, the assurances were very compelling and with time of the essence allied to the fact that my client had given strong assurances himself to various suppliers, we pressed ahead. The indication was that the money could be available in four working days

Lets quickly skip ahead

After ten working days, with my client despairing, I received a call on a Friday evening advising me that the lenders board had rejected the deal. Why?

Lets put it this way. The reasons why varied each time we asked. And most importantly the reasons given were immediately identifiable at the initial meeting. Nothing sprung out of the woodwork

I did not blame the account manager but despite emails flying round all weekend, there was not a hint of contrition from the board members who rejected this deal (which has now found a home with a very reliable and efficient lender)

The key here is that too many lenders do not and will not understand that for many business people, the word given is vital for credibility and their relationships. This is vital. Not only that, a huge amount of time and effort was wasted

Needless to say the lender will not find it easy to regain my trust in the medium term and frankly if they believe this attitude will generate future business, they are very much mistaken

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