Why Do Deals Fail To Close?
It's fair to say that the one thing that's certain about raising finance is that nothing is certain!"There is oft a slip between cup and lip" says an old proverb which means just when you think everything is ok it can suddenly go wrong.
We get a fair number of proposals and not all of them proceed to completion.
So what causes a deal to fail.
I've asked a number of investors, brokers and agents to let me know what they are experiencing and to put a figure on that and here are their results.
The percentage figures represent the number of deals that fail. So number 1 used to be 2 in every 10 deals but now it's about half of every failing deal.
1.Not a
Big Enough Deposit – Was
20% now 50%
2.Planning
– Was
20% now 21%
3.Lack
of Experience – Was
14% now 30%
4.Vendor
pulls out –
Pretty much stable at 18%
5.Terms
too Onerous – Was
12% now 15%
6.Exit
Uncertainty –
Stable at 15%
7.Brexit
Uncertainty – Was
2% now 16%
Some other reasons include;
Delays caused by lawyers.
Delays caused by the lender getting the funds in place.
Delays caused by the proposed borrower failing to provide requested information.
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