Business Debt Workouts: The Benefit of Your File Collecting Dust in a Workout Negotiation

As discussed elsewhere, when negotiating a workout, it is best to present the highest and best offer you can that makes sense and is reasonable under the existing circumstances...and then live with it. Negotiating against yourself is a tricky strategy which can back fire as it suggests your opening offer was misrepresented, as it was apparently not your highest and best offer, and thus all credibility is lost. Thus the question is, "what happens if it is refused and the counter offer is way too large and much more than offered?" How do you respond, is the question.

How about with a pass, walking away? You offered your highest and best and can do no more. We say, let the file collect dust, the offer will seem better in a while. A few months later the offer will seem acceptable, as one thing is certain, there will eventually be pressure to resolve these issues. Wait it out and try again.

Holding pat works. It demonstrates you really have exhausted your resources, and have no room to improve your offer. In fact we frequently offer less in a few months putting additional value on the original offer and demonstrating the truth and voracity of your current situation. If the loan is an SBA guaranteed loan this issue and the payoff by the SBA to the bank on its guaranty may be accelerated with a resolution of the borrower's offer, putting more pressure on accepting the offer.

Not responding, doing nothing and getting ready for the final stages of the workout strategy are appropriate when your offer is refused. Letting the file collect dust, it gets better over time.