We close about 20 deals ayear. For each one we close, we pass on many more. We pride ourselves on beinga “quick no,” not dragging anyone through drawn out diligence. If a deal isn’tgoing to work, we’d rather say so upfront.
One of the first filters isduration. We focus on senior secured facilities backed by short termassets, typically less than 18 months duration. That gives us thevisibility and liquidity we need. If a deal is backed by something like 10 yearsolar loans or 30 year mortgages, we pass immediately.
Complexity is another reasonwe walk. Early stage facilities need to be clean. If the capital stack alreadyhas other lenders, or the company is international , or it’s a revolving creditcard — maybe we can get comfortable with one of those. But if there's two ormore, we’re out. We’d rather step aside early than risk being dragged down incomplexity.
Then there’s the people side.If communication is slow or diligence is messy, that’s a signal too. Howsomeone handles the early process tells you a lot about how they’ll manage therelationship post close. We trust our instincts here.
That said, some of ourfavorite deals have come from companies we passed on the first time. Sometimesthe timing is wrong, or the loan product isn’t quite there yet. When founderscome back with more credit history or better prepared in other ways, we’reready to take another look. A clear “no” doesn’t close the door forever. Itoften preserves the relationship.
So that’s what tends totake a deal off the table: long duration, unnecessary complexity, or a bad gutcheck. Because credit is about judgment. And judgment shows in what you walkaway from.
- Jillian
