How to Navigate Difficult Financial Conversations: Tips from the Allied Team

At Allied, having difficult conversations is part of what we do. In any industry, managing difficult situations and having hard conversations is part of the job, but these conversations can be particularly emotional and stressful in the financial sector.  

While we strive to help as many businesses as possible, not every potential deal is a good fit for our business. In these cases, the prospect is coming off another difficult and disappointing conversation with their current lender and now we must break the news that we aren’t able to help them either. 

Business is business, but we are all human and it is our desire to help every prospect succeed, whether that is with us, or by introducing them to someone else who may be able to help. Understanding how to navigate these relationships in a way that is meaningful for everyone involved has become a fine-tuned skill, developed over years of experience.  

Tips for Navigating Difficult Conversations from the Allied Team 

Don’t sugar-coat it. Say what you mean and mean what you say. Be direct and authentic. Being authentic shows that you respect both them and the relationship. “People want to know where they stand. People want transparency more than anything and they want it quickly,” says Farrah Vargas, Senior Vice President of Business Development at Allied. “Business owners are savvy. They know what’s going on with their business, and transparency along with quick responses help them to make timely decisions that greatly impact their business. We aren’t going to spend 30 days pretending we might be able to get something done; we’ll let you know ASAP what we can or cannot do.” 

Get to the point. “Bad news doesn’t get better with age,” says Dan Karas, Executive Vice President. “When you have to deliver bad news of financial performance, put all the facts as you know them at the time on the table, immediately. Then begin to work through that situation.”  

Focus on the positives. “It’s never easy when you have to have a conversation asking someone to exit a relationship,” says Vargas. “Focus on the positives that you can still provide, even if the loan is transitioning out.” Perhaps it’s that the transition may just be temporary, needed only until the client can become bankable again. Or maybe it’s that you can refer the client to another partner with a more flexible product better suited for their needs. “Always look for pain points they have and provide introductions to people who can help them,” says Vargas. “If you can no longer help them with their funding, the conversation is going to be much easier if you are standing ready with a possible solution for them. It’s always easier to do that in the same conversation.” 

Build trust, build confidence. In a client relationship, you spend a lot of time trying to build trust and you do that by being engaging and making sure that if the client has bad news to deliver, they know there’s no repercussion, no retaliation. Even if we have to find a different solution,” says Karas. “If I’ve created trust and rapport, let’s maintain that.” 

Remember, it’s about relationships. Yes, there is a deal to be made — or not. But ultimately, it’s always about your relationships with your clients and with referral sources. A willingness to be transparent and provide quick answers can salvage a relationship, even in the most difficult conversations. “Reminding them that ‘We’re in this together and we need to find the best solutions to maximize returns for each of us,’ tends to get people to be more cooperative and see it for what it is, which is finding a solution” says Karas.  

Authentic conversations can also foster individual responsibility and empower the client to work towards a solution. In short, an authentic conversation that is based in reality may provide your client with the confidence needed to save their sinking ship.  

Authenticity requires intention, attention and practice. Here are five steps to structure an authentic conversation and get the most out of even difficult conversations based on the book Authentic Conversations: Moving from Manipulation to Truth and Commitment by Jamie and Maren Showkeir.  

  1. State the reason for the conversation.  
  2. State your intention to resolve the issue. 
  3. Name the difficult issues clearly and directly, without judgement.  
  4. Own your contribution to solving the difficult issues. 
  5. Share responsibility by asking how the other party would like to proceed. 

How Allied Can Help 

If you’re preparing to have an exit conversation with a client, keep us in mind as a referral. With Allied, you can be sure that your client/prospect will be treated in a manner that is transparent, open, quick and decisive. Never hesitate to refer your client to Allied. Even if we aren’t a fit, we’ll recommend another partner that may be a better fit. We can work together to find a solution that is in the best interest of your client, potentially providing an avenue for the client to eventually transition back to your bank.  

Don’t wait until the last minute to get Allied involved. If you’re looking at a client’s financials and see things trending in a certain direction, give us a call. We’re always willing to have a confidential conversation about whether the transaction might be a fit for Allied, even if it’s six months down the road. Our flexible financing products may be a solution to your client when traditional banking just doesn’t fit. Give us a call and we’ll work to find a solution that creates a winning situation for you and the client.