Some Small Business People Believe A Workout Is Dishonorable

I believe a workout is extremely honorable.

This is NOT about changing the deal. This is not about renegotiating the terms and conditions of the contract.

This is about a man doing his best to honor the context, purpose and intent of the contract under changed circumstances, circumstances that make it impossible for the borrower to complete the contract as originally committed to. The original contract is impossible to uphold given the fact that the borrower is confronting default which will result in foreclosure and liquidation and likely yielding the lowest possible return to the bank with the highest costs.

When a defaulting borrower decides to come to the bank with the context of increasing the return to the bank as much as possible, reducing the costs, risk and time required for the bank as much as possible and delivering a better result than foreclosure and liquidation by auction, he is acting honorably.

This is the right way to go. This is why a workout is the best path for a defaulting borrower to take.