Lessons Learned: Loan Structuring - Terms and Purpose of Debt
Rick Dennen: Hi, I'm Rick Dennen, Founder and CEO of Oak Street Funding and First Franchise Capital. Welcome back for vlog three of our five part series regarding business financing. And if you've missed previous vlogs, you can check the links below. In this vlog, we're going to cover loan structuring, and if you hear anything from me in this video, hear this, make sure that you match the terms of the debt with the purpose of the debt. The term, the advance rates, the covenants, the capacity, the prepayment terms. These things are much more important than the interest rate and the origination fee. Other intangibles that you really should consider is the expertise and the tenure that your lender has in your specific industry. If you go with the lowest cost provider, without considering these things, you could be trapped when the economy changes or your business model changes, which almost always occurs. A lender that does not panic in these situations is critical to your long term success. Thank you so much for watching and come back next time where we're recovering ownership options.
The third part of our 5-part series with Rick Dennen discusses the importance of understanding loan structuring.