The Commercial Lending Amen Corner

Golf Ball In Hole

The Commercial Lending Amen Corner

This week is one of my favourite of the year. The nights are starting to stay lighter, the football season comes to a head, the FA Cup semi finals, Grand National, Boat Race and best of all The US Masters golf starts.

Not to everyone’s taste, but the Masters is four days of the year where I lay claim to the remote control, sit back and imagine that was me playing in the Georgia sunshine.

In the Masters there is a section of 3 consecutive holes which are called ‘Amen Corner’. This is where your round can either take off or die, it is the make or break stretch of the course which if played well can make a good game great, or played badly can completely break you.

How This Applies To Companies

For most businesses that are borrowing or looking at taking lending, then there is a period of ‘make or break’, or as I would call it, your very own ‘Amen Corner’.

The way this works is by looking at the stages a company goes through to obtain lending, typically it happens like this;

  1. You prepare, get your application sorted and get your lending application in to a lender
  2. You wait for a response
  3. If successful you then negotiate the best deal you can and put things in motion

It all sounds pretty standard, but the key part in this process is the part where most borrowers will take their eye off the ball, it is the make or break, or the ‘Amen Corner’. It sits at stage 2, the waiting part.

Don’t Wait, Play The Game

At The Masters, if you try and play your way round Amen Corner gently and conservatively it generally comes back to bite you. You have to the play those holes with confidence, be bold and trust your game.

The same thing applies when borrowing. If you sit back and wait then you are handing over all your hard work in preparing your business lending application and letting someone else do the really important part.

Don’t wait, play the game and get involved.

What I mean is to follow something like this;

  • Ask your contact at the lender to explain your business, explain what you want and to explain why you can afford the repayments
  • Get clear timescales from your lender, get the best contact details and follow up as these timescales come and go
  • Get updates, don’t hassle the lender but ask for updates, ask whether anything else is needed from you
  • If you have a new P&L or new Financial Accounts then forward them to the lender. Likewise, if you have any new press coverage, new product info or client testimonials then send these in also

The bottom line is to maintain contact, keep the communication open and stay on the front foot. If you ask your contact at the lender to explain your business and proposal you will know they understand you properly. Often the biggest risk is that the lender misunderstands what you want to do.

Amen Corner, the turning point. Be bold, be confident, keep communication open and keep on top of your lender.

By Dave Farmer

Dave Farmer is founder of the award winning commercial finance specialist Lime Consultancy. Lime provide business lending guidance and sensible, practical tips on getting the best commercial lending deal for your business.

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