Tuesday, June 14, 2005

Why lenders have to be tight with the money

Working on a deal right now as I type (well not right now as I am posting this) and a little snafu has come up.

Our client is currently using a non-notification factoring facility in the seven figures. This relationship does not involve the use of a lock box................absolute no no for non notification deal (i.e. - You need a lockbox on these things or else the following happens) We asked for a statement from the current factor and wholly crap, close to 60% of it is aged over 90 days.

I call up the client to see what is shaking and lo and behold, someone isn't paying the factor as they should.

The thing you should learn from this boys and girls is that, nne, as the lender, you need to be in control or else, two, as the borrower, don't screw over your lender............or else!

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