Are They Right and Ready?

Are They Right and Ready?

This series is all about pragmatic advice from our three decades of work representing clients with banks, investors, and buyers. Issue #9 illuminates three of the most basic, yet critical success factors too often overlooked: 1) Targeting the right bank, investor, or buyer; 2) Determining if they have the time and attention to focus on you and your timeline; and 3) If selling your business, clarifying the capital strength of a prospective buyer.

Targeting the right lender, investor, or buyer begins with clarifying your own goals. How much capital do you want?  What characteristics in a buyer do you want? Do you want your employees to be retained? Do you want the investor to be hands-off day-to-day or involved? Do you want a bank with experience in intermodal, or contracting, or manufacturing? Does the bank have the appetite for your size transaction? The challenge with banks is that their marketing departments all trained at the school of “make it sound like we do everything for everybody!”

You don’t want to wait for the bank, investor, or buyer to determine if you are the right match for them; clarify if they are right for you before getting started. If your project involves, for example, a trash-to-energy recycling facility, search the internet for similar projects and uncover their financing sources. That is a good place to start.

Banks are notorious for saying yes, yes, yes, right up to the moment they say no. And how often does their no center on an issue that they knew about way back at the beginning. So it is incumbent upon you to help the banker express their “no” much earlier in the process, maybe in the first conversation. Emphasize what is unique and challenging about your project and give the banker the opening for saying no at the outset.

After helping the banker understand and embrace the rough outline of your company and your project, you want to ask, “Do you and your credit team have the time and attention available to focus on my application in time for a closing by X”?

When it comes to buyers, the targeting process needs to be as exacting as with bankers and investors. What profile represents the kind of buyer with whom you want to be working and what type of business would gain the most value from your company? And when you start interacting with a potential buyer that meets that profile, do they have the capital to close the deal? Before they get to do their due diligence on your company, they should have to pass your due diligence. Ask for and review their credit references and financial statements so you can determine at the outset if they can pay for your company.

At the end of the day, we want the best terms, closed on time, with the right bank, investor, or buyer for the long-term, not just this transaction. This takes clarifying goals and needs, profiling the right candidates, and then making sure they have the time, attention, and capital to close the deal on your schedule.

Most successful business endeavors require determination. Our next issue in the Winning Series is titled, “Determination Wins”. I look forward to sharing what we have learned about the value of determination in accessing capital.

For assistance raising debt or equity, buying or selling a business, or advancing your growth plans, call us at 215-564-3122, or email

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