AmiSight 10/20: When Waiting on Your Bank Costs More Than You Think
An entrepreneur once called me after spending twenty-one months negotiating modified loan terms with her bank. She had been in business for years, owned real estate, and still had assets. She wanted to know what financing options remained.
Options existed, but they were far more expensive than they would have been twenty-one months earlier. More importantly, she still couldn’t explain what had gone wrong, what had changed, or why the next year would be different.
She believed the trouble was temporary. She may have been right. Excellent companies have awful months. Customers return, markets improve, and banks sometimes work with longtime borrowers.
But temporary can last long enough to hurt you.
While she waited, she lost lenders, financing choices, negotiating leverage, and time. Each extension gave the company another six months, but it also let her avoid confronting the bigger question: What needed to change for the business to recover?
Entrepreneurs often believe waiting is the cautious choice. Sometimes it is. Other times, waiting is simply a decision we haven’t admitted we are making. Cash keeps leaving, options disappear, and a temporary problem becomes much harder to solve.
The last I heard, her bank had granted another extension. It may have saved her. I honestly don’t know.
The lesson isn’t that we should panic whenever a business hits a difficult stretch. It is that hope needs conditions. What are we waiting to learn? When will we know it? What will we do if the answer doesn’t improve?
A problem may be temporary. That doesn’t mean waiting for it to pass is free.
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