When flying a plane low on gas, pack more than one parachute. Take one – and bring backups with it – in case the first fails.
When working in an economy low on credit, get it from more than one source. This is an environment when bank relationships fail, and customers start to fall.
Falling Without Parachutes
We now see banks backing out of Letters of Intent (LOI’s) 15-21 days after they accepted the loan application. Sometimes, it is because the bank have stopped lending completely. Sometimes, they halted lending to a specific area or industry. Many staff are upset. Banks have humans making forecasting decisions just like you. It’s confusing as hell out there.
There is no rational reason today to only work with only one lender on only one loan. Businesses need to approach many lenders at once. Our value, our reason for existing at Diamant Carré, is to remove this uncertainty for business owners. We handle many loans inquiries simultaneously to speed up the lending process and certainty of closing.
Recent Loan Denials We’ve Seen
• A client’s business partner (not the client), had a marginal FICO score, and the loan ended up being denied even after the customer received a LOI from their bank.
• Deals whose cash flow was deemed sufficient 2-3 weeks ago, were declined recently
• Loan officer abandonment: loan officers are being fired or are quitting at an surprising rate. Unknown to the client, their loan application goes unknowingly into a bank’s “bureaucratic black hole”
We had one of these this week, on a loan in process. The bank’s underwriting area changed their mind 3 weeks into the process. We were able to find two new lenders (one bank and a private family business). The loan is on its way to closing now. The replacement of the first bank took less than 24 hours.
It’s clear we are in the throes of a recession. Now is not the time to bet your business on one bank’s whims.
Get funded by Diamant Carré when you need it. Get extra parachutes, as part of the relationship with us.
Climb the Wall of Fear
Education is the enemy of fear. Let us know if we may educate you and your staff in a Zoom meeting, with suggestions on who to approach and how to finance it. You can use our ideas to get conversations going. Our pre-qualification process can help you know how much to bid and get you to where you need to be with the acquisition…much faster. Click here to learn more
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