How do your lenders see your company?

I was recently approached by the wife of an acquaintance, who told me a very sad story. Her husband, who had inherited the presidency of a third-generation family business and for years had succeeded in building the company, now found himself near bankruptcy. The origin of the problem was a dispute with a former offshore partner who had sourced raw materials for their family’s company. The dispute grew larger and larger and consumed million of dollars in legal fees.

The husband had personally guaranteed the company’s bank loans. With the interruption in the shipment of new materials, the business couldn’t deliver finished goods to its U.S.-based customers. The firm lost millions of dollars in revenues and quickly defaulted on the loans.

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