CROSSBORDER PROFESSIONAL RELATIONSHIP TRENDS
The Effect of Relationships in Present-Day Cross-Border Lending BY BRYAN BALLOWE In November of 2021, SFNet announced its first Cross-Border Finance Essay Contest, sponsored by Goldberg Kohn Ltd. Members of SFNet’s International Finance and Development Committee judged the essay submissions on content, originality, clarity, structure and overall contribution to furthering and expanding understanding and discourse within the field of cross-border finance. This essay came in second place. The authors of the winning essays have been invited to participate on a panel at SFNet’s 78th Annual Convention in Austin, TX, Nov. 9-11. The third place essays were published in the September issue of TSL and the first place winner will be published in the November issue. ”Crisis is a powerful point of transformation.” Written by Jerry Maguire in his mission statement in the 1996 movie Jerry Maguire, these words are profound and resonate loudly even today. Times of crisis are scary and uncertain, and sometimes force us to change the way we live and conduct our everyday lives.
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THE SECURED LENDER OCT. 2022
Many of us in the commercial finance industry have been around long enough to have lived through several events that have been etched into our consciousness and have created clear and distinct lines of demarcation in the continuum of our professional careers. The terrorist attacks on September 11, 2001, the subprime mortgage crisis in 2007, and the current pandemic are perfect examples. Events like 9/11 and the 2007 meltdown of the subprime mortgage industry were directly related to identifiable and grotesque characteristics of human behavior – hatred, greed and irresponsibility. However, the current pandemic has been created by a nearly invisible, non-discriminate killer, which has crushed our goals, upended our family habits and dynamics, and undermined our overall mental stability. How we emerge from this current pandemic is yet to be seen, however, what has become very clear over
the past two years is how important the integrity of the various relationships that are interwoven into the global supply chain have become. Every interaction along the supply chain is critical, and any breakdown along the way can have an amplified effect on the overall well-being of all parties involved – to which U.S. cross-border lenders are not immune. BRYAN BALLOWE Many cross-border lenders TradeCap Partners rely solely on innovative technology platforms to onboard clients at a head-spinning pace in order to grow portfolios without fundamental underwriting or understanding the relationships critical to the success of their borrowers. While innovation can be a powerful tool in many ways, the success of U.S. cross-border lenders in this present day crisis will be determined not only by their discipline to identify and understand the myriad of different relationships between their borrowers and the various players along the supply chain, but also how well they are able to implement best practices to ensure that those relationships remain viable and as strong as possible. Relationships by definition are the manner in which people or groups feel and behave towards each other. Relationships are born out of necessity and take hard work and time to establish and build. However, out of strong relationships come effective communication, trust and loyalty, which all businesses strive to achieve. It is critical for all lenders to develop that same level of trust, loyalty and communication with their borrowers, especially during challenging times. It is equally important for lenders to understand the relationships that exist between their borrowers and those that play a critical role in their borrowers’ success. Such understanding will enable lenders to more effectively monitor and manage potential risks which can be magnified in times of crisis. When it comes to borrowers that conduct business in cross-border trade, the interconnectivity and importance of the various relationships in the global supply chain are arguably much more complex than for those who do not. For these reasons, it is paramount that U.S. cross-border lenders remain diligent at all times to understand and monitor the various relationships between their borrowers and those with whom their borrowers interact on a daily basis. The global supply chain is made up of many players including, but not limited to, manufacturers, shipping lines, freight forwarders and customs brokers, warehouses, trucking companies and the actual importers and exporters of goods, to name a few. Each player has a different responsibility which