Hey DF,

By now everyone knows I preach the golden rules often: Know Your Customer, Know Your Sources of Capital, and Know You Referral Partners. This is very critical in this environment as people will say and do just about anything to "win" a deal.

Case in Point: I just closed an ABL deal today for an IT consulting and staffing company that is growing rapidly. The opportunity was referred to me by an advisor to the industry I know well. The prospect called him because he entered the market and was quickly offered a lot of promises and term sheets and was skeptical about them and nervous to sign with the parties that issued term sheets. The advisor strongly suggested he stop his process and speak to me.
One was a very large money center bank that would have definitely restricted their facility due to customer concentration and extended credit terms with customers. He had several much more expensive term sheets from non-bank finance companies. I explained to the owner that none of them can write a check that big and probably are not permitted to finance the receivables on extended terms. He did some more homework, discovered what I stated was in fact very true, and quickly signed our term sheet. We closed the facility today.
He felt more comfortable working with us over the big bank as we clearly understood his business, did not restrict the customer concentration, and were comfortable with the extended terms with customers. He clearly blew away the other non-banks as we can and will write larger checks, were a lot more cost effective, offered better advance rates, and could finance the extended term customers. We also offered some bank services the non-banks cannot offer.

I don't "win" deals...... I win customers.....

Best,

KH