Hard Sell

Q: My business has failed, and it's time to liquidate assets. Is it better to work with the bank on negotiating the sale of my company's assets or leave it alone and let the bank handle it completely?

A: This is a very subjective question, in which many factors have to be weighed to come up with an answer. How critical is your time frame? Do you have a good relationship with your lender despite default, and what is your emotional state after such a loss? If your relationship with your lender is good and you are up to the emotional challenge, it's always better to stay involved to the very end. After all, when everything is liquidated and gone, you'll be the one responsible for the remaining debt, and the bank can, and probably will, sue you for that money. You and you alone will have the contacts in the industry to help you get top dollar for your assets. A bank will more than likely not have useful contacts and while trying to recover as much as it can, will have to pay industry experts for consulting or sales fees, further decreasing the total recovery.

My suggestion is to ride it out to the end. Businesses fail every day, and it's the character you display in handling that failure that can determine whether a lender will loan you money in the future.

Doug Hood is a co-founder of Rainmaker Capital Corp., a capital acquisition consulting firm in Cartersville, Georgia. Co-founder Marilea S. Hood contributes to this column. Send questions or anecdotes via e-mail to doughood@mindspring.com.