How to Find the Right Lending Partner: An Advisor’s Guide
Gavin Harrison, of the Dow Schofield Watts Debt Advisory team, shares expert insights on how business owners can find the right debt raising lending partner to support long-term growth.
Choosing the right debt raising lending partner is a critical step for any business looking to secure funding for growth. Whether you’re scaling operations, entering new markets, or strengthening your balance sheet, the right lender can make all the difference. This guide outlines key considerations to help you navigate the process and position your business for success.
1. Start with strategy
Debt should be a strategic tool—not just a short-term fix. Align your financing with long-term business goals and weigh the cost of interest against the flexibility you may need in the future.
2. Build relationships early
Don’t wait until funding is urgent. Start building lender relationships 9–12 months before you anticipate needing capital. Early engagement fosters trust and can lead to better terms when the time comes.
3. Craft a compelling narrative
Lenders invest in confidence. A consistent strategy, backed by a capable and credible team, is essential to securing the best debt package.
4. Be transparent
Lenders do not like surprises. Share potential risks and challenges upfront and demonstrate how your business is mitigating them. This builds trust and showcases the strength of your management team.
5. Know your value to the lender
Understand your position in the lender’s portfolio. Will you be a priority client or one of many? Offering additional services like transactional banking or FX can elevate your profile, especially with traditional banks.
6. Don’t Be Discouraged by Rejection
One lender’s “no” doesn’t mean all will follow suit. Different institutions have varying policies and risk appetites and even individuals can impact an outcome. Always seek multiple perspectives.
7. Leverage Competition
Running a competitive process with multiple term sheets often results in better terms. While lenders may prefer exclusivity, they understand the value of being competitive from the outset.
8. Consider timing
If your funding need is event-driven, choose a lender who can meet your timeline. The lowest-cost option may not be viable if speed is essential.
9. Think about debt quantum
Larger facilities can be more attractive to lenders, even if they require more upfront analysis. Starting small may seem prudent, but a well-structured larger request can unlock better opportunities.
10. Look beyond interest rates
The lowest rate isn’t always the best deal. Consider flexibility, covenants, and other terms that could impact your ability to operate effectively.
Finding the right lending partner is about more than securing the cheapest available capital; it’s about building a relationship that supports your business’s long-term success. By approaching the process strategically, transparently, and with a compelling story, you’ll be well-positioned to attract the right lender and negotiate terms that truly work for your business
Debt Advisory Partner