1. Welcome to Special Assets.
If your business loan has moved into a department called “Special Assets” or the “Workout Department,” it means that you are in a “special kind of trouble” and they want to “work you out of the bank.” They are not your friends, but do not treat them as an enemy. Respect them and the process. They lent you money with the intent of getting it back. You’ve entered a gray zone of uncertainty and bankers don’t like surprises. If you are here, that means they no longer trust upper management. Managers and the company have now become unpredictable. Your principal job now is to work as fast as possible to earn back the trust of the credit community by becoming predictably successful again.
Task: Introduce yourself to the workout banker. Try to meet face to face; if not in your place of business, at their office. Have pen and paper in hand. Ask them for a clear list of expectations—what they would like to see from you and when. If there is something unreasonable that they are demanding, voice your concern immediately. Don’t argue; just try to come to mutually acceptable terms.