Rudyard Kipling’s famous poem If comes to mind during difficult times. A message to his son, it is worth remembering now, as so much of the world seems to be losing its center.
As verse goes, it may not quite be Shakespeare, but the message is one that underlies the most basic aspect of structured lending by New York Private Finance. We will not lend for less than three years, and we strongly recommend tenors of five or six.
Why? Well, it is not in anticipation of the tragic events unfolding on the world stage at present, but rather because every business faces unforeseen difficulties from time to time, if not on a regular basis. Most reflect unanticipated changes in pricing, competitive pressures, tax rates, labor difficulties… But national and international politics can have an impact, as we are currently witnessing. Recognizing this basic fact of life, we do not want our loans to add to the problems our clients face from time to time, and we certainly do not want out loans to add to the temporary pressures that complicate their business lives.
Although we cannot control the turn of events, we believe that a six-year tenor ensures our clients will have the time they need to navigate rough waters until matters adjust and clearer sailing returns. Equally important, unlike virtually every lender out there, we do not charge fees for repayment. Prepayment penalties punish success, and our loans are designed to reward winners, not impede them.
To quote Yeats, when “Mere anarchy is loosed upon the world”, we want our clients to have plenty of time to consider options and pursue optimal strategies until chaos subsides and a more ordered business environment returns. And we are even prepared to consider extensions as need arrives, thereby taking one potential problem off the table.
Who thought poetry could inform the principles of wise banking? Imagine.
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