AmiSight 3/19: Lenders Underwrite Certainty, Not Optimism
- Ami Kassar
- 6 hours ago
- 1 min read
Before seeking financing, every borrower should ask a simple question: How will lenders actually see my situation?
Entrepreneurs naturally view their businesses through their own experience—past wins, loyal customers, and confidence that the next opportunity is around the corner.
Lenders see something different. They focus on what is certain today and how they get repaid.
A contractor we recently spoke with is waiting on their next government contract. From their perspective, they just need a short bridge based on their strong track record. But without a signed contract, a lender isn’t bridging revenue—they’re betting it will appear. That makes financing far more expensive.
We had a similar conversation with a borrower refinancing a partner buyout. An SBA loan could offer a long term and reasonable rate, but it would likely require liens on personal real estate. The borrower prefers not to pledge those assets.
So the choice becomes a familiar one in lending:
• Lower cost capital that requires more collateral
• More flexibility with shorter terms or higher payments
• Or private capital with fewer constraints—but at a much higher cost
None of these options is wrong. They simply reflect how lenders price risk. Our role isn’t to choose the path.
It’s to help borrowers clearly see the trade-offs early—cost, collateral, and structure—so they can make the right decision for themselves.
