SBA Loans: Ownership. What Does It Mean?

Ownership: a quality we all look for in an outstanding employee, partner, manager, leader or boss. The person who “takes ownership” is one who makes a full personal investment in a cause. This is a person who makes the mission (i.e. achievement of the goals subscribed to) a mission of personal importance, committing to do more than his best but also rising to the needs of the situation, whatever they may be. It involves creativity, decisiveness, leadership, accepting responsibility (without being asked), decision-making in the face of changing circumstances and sensitivity (if required). The person who takes ownership will be whatever is needed to succeed at any given moment.

Many do their job, very well even, but still wait to be told, wait to be reviewed, taking few chances while still doing a damn good job. This is not “ownership”. These people may make great employees, but not ones who will solve problems and forge ahead despite barriers.

Ownership means caring more about the outcome than the collateral issues and doing whatever it takes to succeed. Avoiding excuses, accepting full and complete responsibility, owning the results… this is ownership, a personal commitment beyond dedication and completing the task with excellence. Caring about the outcome, not for personal gain but because the goal is important and you. Owning the outcome: a willingness to sacrifice self for the cause, relentless pursuit of success, victory and accomplishment… breaking through every barrier imaginable.

This is what heroes are made of. This is what it means to “take ownership”. We have our own language to describe this attitude, it goes like this:

“Take no prisoners… eat the wounded.”

That’s ownership to the max. This is our standard. We own our results. Nothing prevents us from succeeding and every person in our SBA loans consulting company subscribes to this standard.

There Is Always "hair" On A Workout. Yes, Each Workout Is Unique

A workout is always a unique experience.

Every workout is different.

Every workout requires a focused, specific strategy to handle the unique aspects of the particular fact pattern that the situation requires.

Every debt workout has its own twists, its own issues and its own demands.

It may be a particularly tough landlord who will sue on the defaulted personal guaranty and not negotiate.

It may be a tough second or third lien holder who refuses to accept zero, despite the appropriateness, and holds up a transfer or sale or a conclusion of some sort.

It may be a difficult lessor of equipment not willing to accept our offer.

Maybe it is a spouse unwilling to accept the proposed strategy.

It could be the issue of a large and valuable–––but difficult to collect–––accounts receivable aging.

It could be large inventory or expensive collateral not worth much even at auction.

It could be co-guarantors with collateral and net worth.

Maybe it is a home with no mortgage, thus not upside down at all.

Maybe it is a partner who does not want to do a workout.

It could be license issues, contracts in process that cannot be assigned or minority-owned status that is important to maintain.

Maybe it's cross-collateralization by other profitable business entities owned by borrower.

The list of unique possibilities and unusual issues goes on and on and on. Every workout is unique. The strategy may be similar but the unique facts of each situation requires a fresh review and a creative application of our skills to successfully protect and support a successful workout. The important point to understand is that we recognize this fact and do not employ a "one strategy fits all" approach. Quite the opposite is true. Every workout is unique and requires an adapted strategy designed to handle the specific issues of each unique workout situation. Never are two the same. Never are two inclusive of the same challenges. Every workout must be designed for the specific problems encountered in the workout being addressed.

Yes, there is always "hair" on every debt workout, i.e., unique facts that make each workout special. We know this, and thus it is exactly how we approach every unique situation, giving it what it needs. This is one reason why we are so successful at what we do. We treat every workout uniquely, specifically and with great respect for its nuances and differences.

This works. Call us. Examine your options. This is the only place to turn for alternative solutions, alternatives to disaster. Call 413-584-2581 and Norm will arrange a no-obligation teleconference to discuss your situation.

When to Pull the Plug and Shut Your Business Down. It is Your Business, Not Your Child.

I talk to many small business owners who have not taken a check in quite a while. They're living off credit cards (that will end), savings (that, too, will end) and spousal support (that goes over big) for reasons that defy logic and are really based on emotional, wishful thinking. I ask them, if we strip the debt away, freeing the business to run without debt, can they turn a profit, take a check and retain some earnings? Many say "No, but let's do it. It will bring me closer to breaking even. I can make it from there." WRONG.

Please consider--as the song goes--we need to know when to cut, know when to draw and know when to fold.

If a business cannot operate successfully--retaining profitability and some earnings after paying the owners a paycheck--then it's time to sell or shut the business down. It is not worth operating. You are wasting your time, your capital, and your opportunity. For these businesses, we need to do an adjusted version of our strategy and simply reduce the personal guaranty so one can emerge ready for a new life.

Many, many small business owners hold on to their businesses without taking a check, without retained earnings, without a chance for growth and development, without an opportunity to turn it all around. And yet, as if it is their only child, they hold on to it, going down with the ship and a bunch of bad excuses, mainly because they are simply unwilling to accept reality: not every business can succeed or should succeed.

When the business has demonstrated that it is a failure, the smart business owner liquidates it and works out the personal guaranteed debt then moves on to the next business plan, smarter, and with resources remaining.

Far too many small business owners are too emotionally attached--refusing to admit defeat, unwilling to let go of the dream, unprepared to close the doors and start again--so they go down with the ship, pulling everyone associated with them down as well. Too many small business owners believe giving up is not an option, when in reality, it is not about giving up, it is about making a prudent, responsible decision that will springboard you to higher ground, a better view and a new opportunity to start over and be more successful.

This decision is not a failure. It is an organized retreat to save resources and create a better plan, one that will work, win and succeed. Yet, you tenaciously hold onto a dream that is turning into a nightmare? You must be strong enough to read the numbers, understand what they are telling you and if the message is that this business equation will not work, then holding on for one more minute is a mistake and a waste. Planning an exit strategy is the only responsible way to go.

This downturned economy has toppled thousands of previously great business models. Be smart and recognize your reality. If it can be fixed with a debt removal strategy--a workout--call us. We can engineer this. If it will not survive even with debt elimination, then kill it, its days are over. Exit with a liquidation plan and a personal guaranty workout.

Call us for a no-obligation teleconference to review your situation and make recommendations. Norm will arrange it: 413.584.2581

Reluctant Entrepreneurs: Necessity Driven or Opportunity Driven?

Main purpose of this blog is to give you an insight on the topic and guide you further into understanding everything related to SBA loan default workout.

We have discussed the natural path the unemployed can consider in this tight job market: Converting hobbies to small home businesses, pursuing one’s lifelong passion, or exploiting one’s expertise and experience. These are very exciting, stimulating, a great alternative to the rat race, but not for everyone.

Now, however, we see a new breed of small business owners, what is being called 'reluctant entrepreneurs', necessity driven, not opportunity driven.

With millions of workers out of work, and bills piling up, there is a steady flow of talented out of work men and women who simply need to create revenue for the family's survival. They are making little progress in getting a job and the future looks very grim.

What to do?

Jon the ranks of many, create a new business, become an entrepreneur, reluctantly and necessity driven but we all do what we must to survive and support our families. Income is a requirement, so you open up a business and pray for success.

I get it and salute the bravery required to support such a decision, especially when motivated by necessity not passion, a whole different story.

The context will control the situation, so you must get your context correct. Define your context, what are your basic parameters that will support and define success? Define this and stay on track.

First question is how much cash do you have to invest? Be careful about capitalizing your new business with borrowed cash, it requires debt service, monthly payments and this can be the beginning of the end if things do not work out as planned or as quickly as planned.

Do not withdraw your IRA money by borrowing it, accepting the tax and penalty and diminishing its value significantly. Seek assistance; you can invest your IRA without penalty or taxes if you do it properly. I caution you against using your retirement money fora start up, but it is a source of needed cash and will be done by many so do it carefully and correctly.

Please have a plan and a cash flow pro forma; it is the road map to success and review it weekly.

It must be kept in mind that you have to create income as soon as possible, it is the objective. Do not embark on a business journey that does not promise a relatively immediate return, cash in to live off and invest with.

Revenue first, growth second. Do not create an organization in anticipation of the inflow of expected revenue. Create an organization after you demonstrate you need it. Income first, growth and development second.

Have a plan and have it reviewed by someone qualified and willing to tell you the truth.

Will it work is the question? You have no time for mistakes.

Call if you need an opinion or direction.

Remember this is not about a passion; it is about creating revenue and income. Plan accordingly. It is an important decision and a necessity for many, as many jobs willnever return and many unemployed will never find other employment in the near or long term future. Thus, entrepreneurship is about survival, not passion.


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