Sign up to save your podcasts
Or
Share Never Sign a Term Sheet Without Reading Every Line S1E12
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
Never Sign a Term Sheet Without Reading Every Line S1E12
Ever signed a term sheet without reading every line? You might be building your business on a dangerously shaky foundation. The financial consequences can be severe and unexpected.
Term sheets aren't just preliminary paperwork—they're the DNA of your entire commercial lending relationship. They establish everything from interest rates and fees to collateral requirements and prepayment penalties. Once signed, the rest of your deal will follow this blueprint, making changes expensive and frustrating.
Let me share a cautionary tale: A client of mine skimmed over their term sheet, missing a clause allowing the lender to call the loan if occupancy dropped below 80%. When an off-season downturn hit, that's exactly what happened. The result? A frantic scramble to refinance under pressure, with limited options and bargaining power. This entirely preventable situation cost them significantly in both stress and dollars.
The solution is straightforward but critical: slow down. Read term sheets line by line, preferably with someone experienced in spotting potential landmines. Negotiate aggressively at this early stage—not when you're reviewing final documents. Remember, if it's in writing, it's enforceable; if it's just discussed, it's wishful thinking.
At Cardinal Capital, we treat term sheets like architectural blueprints, ensuring everything is perfectly positioned before construction begins. This approach prevents the equivalent of building staircases that lead nowhere in your financial structure. Whether you've outgrown your bank's credit box or need more creative solutions, we specialize in getting good deals done, even those that don't fit traditional banking templates.
Ready to ensure your next term sheet works for you rather than against you? Connect with me on LinkedIn or visit cardinalcapnet. Keep your capital stack strong and your deals moving forward with the right foundation.
For more commercial capital information, contact us at [email protected]
Let's get social!
FB: @cardinalcap
LinkedIn: @cardinalcapital
Visit us online at cardinalcap.net
View all episodes
By Cardinal CapitalEver signed a term sheet without reading every line? You might be building your business on a dangerously shaky foundation. The financial consequences can be severe and unexpected.
Term sheets aren't just preliminary paperwork—they're the DNA of your entire commercial lending relationship. They establish everything from interest rates and fees to collateral requirements and prepayment penalties. Once signed, the rest of your deal will follow this blueprint, making changes expensive and frustrating.
Let me share a cautionary tale: A client of mine skimmed over their term sheet, missing a clause allowing the lender to call the loan if occupancy dropped below 80%. When an off-season downturn hit, that's exactly what happened. The result? A frantic scramble to refinance under pressure, with limited options and bargaining power. This entirely preventable situation cost them significantly in both stress and dollars.
The solution is straightforward but critical: slow down. Read term sheets line by line, preferably with someone experienced in spotting potential landmines. Negotiate aggressively at this early stage—not when you're reviewing final documents. Remember, if it's in writing, it's enforceable; if it's just discussed, it's wishful thinking.
At Cardinal Capital, we treat term sheets like architectural blueprints, ensuring everything is perfectly positioned before construction begins. This approach prevents the equivalent of building staircases that lead nowhere in your financial structure. Whether you've outgrown your bank's credit box or need more creative solutions, we specialize in getting good deals done, even those that don't fit traditional banking templates.
Ready to ensure your next term sheet works for you rather than against you? Connect with me on LinkedIn or visit cardinalcapnet. Keep your capital stack strong and your deals moving forward with the right foundation.
For more commercial capital information, contact us at [email protected]
Let's get social!
FB: @cardinalcap
LinkedIn: @cardinalcapital
Visit us online at cardinalcap.net