Steve Benson

If you're over $3 million, I think you start creeping into that area.

Gotchas include...

other than the price, obviously, the lender being able to call a loan back at their discretion.

So them being able to say, oh, that 500 grand you borrowed, we need that back.

We need it back now.

And that's obviously a problem because you probably took that money so that you can spend it and invest it, and you probably don't have it laying around.

So them being able to call the loan back is a problem.

Liquidity covenants.

You see this a lot with banks.

They'll tell you,

hey, we want you to have, you're borrowing a million dollars from us and we want you to always have at least 500 grand in the bank with us at all times.

Well, so then you actually only just borrowed a half a million bucks because the other half million you can't touch is just a pretty number on a piece of paper that you can never do anything with.

So that's a silly thing that some lenders will do.

I mean, you'll see lenders say, oh, here's a million dollars.

We have to have a million dollars in the bank.

And you're like, well, I mean,

That's, that's crazy.

Well, what's the point?

Um, so, uh, covenant, the whole covenant section is all negotiable and all to be looked at with a, with a fine tooth comb.

So like speeding up your payback, if something changes or changing your changing the interest rate, if something changes, like if your revenue slows or contracts or any term they want, really, if you, if you lose a key employee, they can, they can put whatever they want in a covenant section.