The Overlooked Step That Can Delay an Asset-Based Lending Deal

The success of a lending transaction can depend on banking processes outside the lender's control. That relationship deserves a closer look.

When a lender commits to a closing timeline, that commitment carries weight. Borrowers make plans around it. Referral partners expect follow-through. And behind the scenes, lending teams work to make sure everything comes together as expected.

But even the most carefully managed transaction can run into a problem that sits largely outside the lender's control.

The borrower's bank may not be ready.

New credit agreements often require changes to a borrower's existing banking arrangements. Making those changes can depend on a bank operating with its own processes and priorities.

For that bank, the work may be another request in the queue. For the lender, it may be one of the final requirements standing between an approved transaction and funding.

That difference in urgency can create problems that extend well beyond a delayed closing.

When Your Timeline Depends on Someone Else's Priorities

When a banking requirement holds up funding, the lender is often left managing the fallout. Closing schedules may need to change, and lending teams can spend valuable time resolving issues with an outside bank. Meanwhile, borrowers are left adjusting their plans around a delay the lender has limited ability to resolve.

Even when borrowers and referral partners understand the source of a delay, the lender is still responsible for managing its impact on the transaction and those relationships.

That creates an uncomfortable reality for lenders. Their ability to deliver on a commitment can be judged by the performance of an institution they don't directly control.

Your Banking Partner Should Share Your Priorities

Lenders routinely assess the capabilities and reliability of the partners involved in their transactions. Treasury management deserves the same scrutiny.

Most commercial banks can provide the services required to support asset-based credit facilities. But the availability of those services says little about how a bank will handle the timing and coordination involved in a particular transaction. Even when a controlled account or DACA is critical to the lender's closing schedule, the bank responsible for it may be working on a very different timeline.

That makes it worthwhile to understand how a banking partner approaches implementation before the transaction reaches its final stages. How familiar is the bank with the lender's credit agreement requirements? Who coordinates the necessary account arrangements, and how are issues handled when several parties need to be involved?

These are practical considerations that can help lenders identify potential obstacles earlier and establish clearer expectations with their banking partners. For firms managing multiple borrower relationships, they can also inform decisions about which banking arrangements are worth relying on from one transaction to the next.

A More Specialized Approach to Treasury Management

TriState Capital Bank developed its specialized Treasury Management offering with these challenges in mind.

The bank emphasizes coordinated implementation and a repeatable model that can support lenders across multiple borrower relationships. Its approach is designed to align banking arrangements with the lender's credit agreement while accounting for how borrowers manage their cash day to day.

That includes controlled accounts, DACA support, lockbox services, and balance reporting to support lender oversight of cash activity. TriState Capital also provides payment services, fraud controls, and liquidity solutions that borrowers can use in their everyday operations.

Support continues after the accounts are established. Borrowers have a single point of contact for treasury management services, helping them manage their banking arrangements and address questions as needs evolve. For lenders, that coordinated approach is designed to provide greater consistency across borrower relationships without adding unnecessary complexity to daily cash operations.

A banking relationship that works well at closing should continue serving the lender and borrower long after funding. Choosing a partner that understands both sides of that relationship can make treasury management a more dependable part of the lending process.

Make sure your banking partner understands what's at stake.

Learn more about TriState Capital Bank's Treasury Management services for asset-based lenders.

Contact us to discuss: TriStateDeposits@tscbank.com

Non-deposit products are: Not insured by the FDIC; Not deposits; May lose value; Not Bank guaranteed.

TriState Capital Bank is a Pennsylvania chartered bank. Member FDIC.