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Published:April 21st, 2008 08:00 EST
Pay Me Now or Pay Me Later

Pay Me Now or Pay Me Later

By Joel G. Block (Mentor/Columnist)

I just met a gentleman at my health club where I work out, and we started to chat. He told me that he`s a forensic investigator which means that he does analysis that is even cryptic to accountants and others who are used to looking at books and records. Actually, he works on the collections side, meaning that he supports the large financial institution when they make loans that go bad. He`s the one who helps them find assets of both the corporations and the individuals to repay the loans.

He recently had a case where one of his clients made two different loans and both of them went south. Each loan was for approximately $10 million in equipment leases. The company that they loaned the money to went under and the lender got stuck taking back the equipment, which was worth just pennies on the dollar. The lender was never able to collect the deficiency.

Therefore, they immediately assigned this gentleman as the collector on the case " not to make outbound phone calls to terrorize the person the way that personal collectors are thought to do " but to help the bank uncover the assets that the borrower has so that the lender could attach them and apply them to the balance that was due on his lease or loan.

This gentleman frequently recommends that in a larger transaction the lender doesn`t wait until the loan goes bad before they engage him. He recommends that they engage him on the front end when the loan is being created. That`s because there needs to be a certain amount of verification done about the information that`s put on the application. In many cases, much of that information is never verified. And it never becomes relevant until there`s a problem down the line.

This gentleman was adamant that, had the client engaged him in advance, they would have known that the collateral for the loan (i.e. stocks, bonds and real estate) were, in fact, bogus. He could tell this simply because there was no documentation that supported this information. There were no institution names, there were no broker names and there was nothing that would substantiate the claims that the person representing the company made to the financial institution.

The lesson is this: "You can pay me now, or you can pay me later, but you`re going to pay." I frequently tell prospects that whether you hire me or not, you don`t get to keep the money. You may waste the money on a variety of initiatives " the money may leak out the back door through errors, expenses and other kinds of problems, or you can engage the services of a competent professional " someone to advise you in recognizing your business in the way that you want it to run.

By investing the money, you get future benefit. If the money leaks out the back door, it`s gone forever " and more than likely, that amount will leak out again next year, leaving you on a treadmill that runs faster and faster with each passing year, as you become more tired.

So, as you are working hard every day to build your company, or as you`re building your career, remember: penny wise and pound foolish. Pay me now or pay me later, but whether you engage a professional or not, you don`t get to keep the money to spend on family vacations because the money`s going to go out the door one way or the other. My caution to you is that you simply be as smart as you can be in the operation of your business.

About Joel G. Block, President of Growth-Logic, Inc.
Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker and advisor. To bring Joel into your company, please visit or