Managing Capital and Dealing with Lenders

A business can grow by reinvestment of earnings. More often than not, however, family-owned businesses rely on the ready availability of capital and bank loans not only to finance growth and opportunities, but also to smooth out their day-to-day cash flow needs. The decision to bring in an equity investor or borrow money is a major one for any business enterprise.

Over almost thirty years, Kaufman Law Group has developed working relationships with lenders both large and small in the Chicago area. We’re also familiar with programs available to businesses through the Small Business Administration (SBA). It is often necessary to engage in a discussion with several lenders in order to find the right fit for a client company. We know how to prepare a proposal for a loan and act as an advocate for the business in obtaining loans or capital.

Particularly in the current environment, family-owned businesses need an experienced advisor on their side in negotiating the terms of any loan, large or small. Governmental regulators often monitor the lending activities of banks closely. As a result, new loans can have onerous terms such as negative financial covenants and minimum equity requirements. These need to be managed on an ongoing basis.

More often than not, the business owner, thankful for approval of her loan application, does not review the loan documents and is surprised when these covenants become technical defaults. A default can turn into a disaster for a business. We’ve helped negotiate favorable results for companies that have gotten into trouble as a result of technical bank defaults.

Kaufman Law Group is experienced in reviewing and negotiating the terms of bank loans for its clients. We know the rules and regulations that the lenders need to follow. We know the terms offered to other businesses and the terms that are generally available in the marketplace. We help our clients get the best deal possible while avoiding the tricks and traps that are sometimes a part of business lending today. This saves our clients both money and hassle.

For assistance in working with your bank, finding a new bank or in obtaining a government loan, contact us.