Lender Enthusiasm And Acquisition Financing

Closing a deal is a challenging project with a multitude of little details to pin down. Even with the most advanced project management skills, there are many variables that can upend a planned acquisition financing close date. Acquisition financing lenders come in a variety of shapes and sizes. Some are large multi-billion-dollar funds and others are small or mid-sized funds.

Regardless of the size of the acquisition financing provider, each lender has its own personality traits which are revealed throughout the deal process. Due to the work involved to get to the closing table, it is advisable to work with an acquisition financing lender with a high level of enthusiasm for your deal. The deal process usually includes management meetings, business diligence, financial diligence and legal documentation. Some lenders sound enthusiastic on the front end only to regress once they get to a tough spot in the deal process.

Usually, this occurs with large institutions with a bureaucratic approach to deal screening, who do not get full credit buy-in for the deal on the front end. A surefire way to increase your probability of closing is to screen for lender enthusiasm at multiple levels within the acquisition financing lender. If the new business officer has strong enthusiasm for your deal, he or she will invest more of themselves into the deal process. They will get in front of their credit people and make sure they are onboard with the term sheet. They will spend more time with the Confidential Information Memorandum learning and ask intelligent follow-up questions.

They will make themselves widely available for management calls. They also place more emphasis on educating the prospective borrower on who they are and what their process entails. Their investment in the deal process pays dividends should an unexpected issue arise during diligence. If they are highly enthusiastic and invested in the deal process, they are several times more likely to overcome a negative finding and still close the acquisition financing. Through their engagement with the deal, they form a working partnership with the borrower and assume joint ownership over the need to close. In the end, lender enthusiasm pays significant deal closing dividends.