In A Workout, Your Lenders Do Not Care What You Want

Business owners attempting to negotiate a workout with the bank, the SBA, or even the IRS must realize something very basic about their opposition: In order to achieve your objectives you must know what the goals and objectives of your opposition may be. If you satisfy them, you win. If you attempt to achieve something they are uninterested in or if your arguments are about issues that are not important to them you will not achieve your goals, ever.

It’s about what they want, not what you want. Understanding this makes a huge difference and is the factor between possible victory and absolute defeat. I say “possible” because even if you provide them with what they are interested in you still may not achieve your objectives but at least you will have a chance.

So, here is the real deal. Your opposition is uninterested in what you may achieve in the future and how they may benefit in the future is unimportant to them. They lack vision and are uninterested in your projections. It’s the here and now only that they are interested in, not what future success may do for them. They are unwilling to make a bet on your success and will take whatever losses may occur based on today’s liquidation value of you and your assets.

Jobs? Who cares. They do not mind putting you out of business. Less at auction, more if sold in the market, OK, but only if it’s done immediately, as in NOW. In short, they all will gladly accept less – lots less – today than risk it all for more tomorrow. This is hard to believe sometimes when the potential for more seems so clear and obvious to the debtor but it is what it is to the bank, IRS, or SBA – a risky gamble that they have no intention nor desire to enter into.

While recapture of the money owed is important, in a word, closing out the case is more important even if it means getting nothing in return. They all have their guidelines, rules, and objectives and as long as they can check off the boxes and comply with regulations, they are doing their job and everyone (except for you) is happy. Even if it means taking a huge loss and putting you out of business, they do not care.

Therein lies the secret to success. Knowing what drives them and what they are trying to achieve as opposed to what you want to accomplish is the key to a successful negotiation.

Call me if you are in a negotiation and it is not working out as well as you would like, I will help you and guide your negotiation.