save the suspense.
Halloween reminds us there are times we enjoy suspense. Discussions with your lender are not one of those times. To enable more collaborative conversations and encourage better outcomes, borrowers should save the suspense.
Presentation influences perception. You don't often see scary movies with good lighting, clear cause-and-effect linkage and a friendly/far-in-advance heads-up from the killer. Knowing something is coming but lacking complete information creates suspense - a feeling of being in the dark/fear of the unknown - which often overrides behavior. Consider the "we need to talk" text…how often are the following thoughts rational or unbiased? how often are the self-drawn assumptions and conclusions constructive (or correct)?
Arm yourself with the information you need to eliminate suspense. Put yourself in the lender's shoes - what's important to them? how will they be impacted by what you are about to tell them? how can you address/pre-empt concerns?
What's important to them: (as a firm) ensuring they will be repaid, (as an indivdual at the firm) maintaining good internal standing - i.e., high proportion of borrowers in the "green" bucket (performing, in compliance, good controls/reporting, etc.).
How will they be impacted: understand what is spelled out in your credit agreement, show the math and (as needed) think through possible solutions.
How can you address: not always about fixing, about communicating - showing you're on top of it - have conversations early, be upfront and cut to the chase; give your lender something to work with (help them help you).
The Uncommon Borrower saves the suspense when approaching their lender - they 1) plan conversations in advance, 2) understand lender/credit agreement POV and barriers/thresholds, and 3) “help them help you” (be upfront, present them with something they can work with, help control the narrative).