I Want To Say Yes But It Is Much Easier To Say No.

This blog is a fairly new project for me. I wasn’t sure if I should post this today on New Year’s Eve. Obviously, I decided to do so. Before getting into it I would like to wish you a happy holiday and a healthy, prosperous New Year. May next year be your best.

If you’ve presented an offer, especially one which you consider to be a good opportunity, to a potential private lender you are going to want a response. If you have presented a thoughtful plan you will probably get one. The possibility that you will get a response will rise considerably if you have established a relationship with the lender before the need arises. Please remember that if your offer was unsolicited the recipient is not obligated to respond at all.

I will almost always respond to a request that comes from an investor whom I have met, have spoken to on the phone or with whom I have had more than a cursory correspondence. I attempt to respond to all offers which are well presented. However, I often have multiple projects in progress simultaneously and, like most everyone else, I do not always have a lot of time. Generally, at times when I have more active projects I have less funds available for new projects so it would be more likely that I would have to reject even an excellent proposal. At these times I must triage my responses—you will get better responses if you make better proposals.

If you are making your first contact the odds that I will give a detailed response increase significantly if you are polite and if your correspondence shows that you have put significant thought into your plan. (The odds that I will accept your proposal depend more on the type of deal and whether it is a good fit for my current situation.) Your proposal must be clear enough that I can understand most of it on the first reading. If you have identified most of the parameters I discussed in my recent blog post titled ”Evaluating a Potential Loan: The Deal" and your deal appears to be a good fit I may respond with some questions via e-mail. If I have responded this way I will tell you the best way to respond (if I haven’t stated otherwise the way I contacted you is preferred). I prefer e-mail for preliminary contacts. My schedule is not always traditional. I sometimes take breaks and go places where phone reception is spotty. Also, I often prefer to evaluate deals late at night when there are few distractions. A good proposal will have some supporting documents and e-mail allows me to evaluate your proposal when it is convenient for me. Hint: I am willing to spend more time on a less than ideal proposal if I can review it when it is convenient. If I have asked you to respond by e-mail you may not receive an answer if you leave me a voice mail. (If we have not spoken via phone before, obviously, your number is not in my contact list. I do not always have time to pick up calls from unidentified callers and your message is more likely to go to voice mail if it is not identified. I never pick up calls from “private” or blocked numbers.) If the voice mail you left acknowledges the questions in the e-mail but does not address them your voice mail will probably not be returned. In fact, you may have demonstrated that it will be difficult for me to work with you because you are not able or willing to follow my simplest directions. It is not unusual for me to receive a voice mail message to an e-mail in which I asked several specific questions that is something along the lines of: “I received your e-mail and will get you those answers but just wanted to call and say hello. Please call me when you can.” If I asked questions in my e-mail I am interested and am probably in a position to help with your deal but if I wanted to speak with you and thought it was the appropriate time I would have called you. Believe it or not, most of the people who leave me this type of message never provide the specifics I asked for in my initial response. It is always much easier and faster to reject an offer. Don’t give me a silly reason to do so.

If I took the time to review your proposal and rejected it that doesn’t necessarily mean I didn’t think the proposal had merit. It may simply be a poor fit for my portfolio or my funds may be committed elsewhere. If that is so I will tell you. If you get the project funded let me know how it turned out. There may be an opportunity to work together on another project down the road.

If you persist too long trying to convince me after I have made my decision to not participate you may actually be convincing me that we would not be compatible business partners. In that case the likelihood that I will give serious consideration to your next proposal diminishes rapidly. In many deals I start out as a lender but become an advisor. I often have more at stake than the borrower. If I decide to fund your deal I have decided to become your partner. I choose my partners carefully. When you present a well thought out plan I generally want to say yes but please remember it is much easier to say no.