Why Do Deals Fail to Close?

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.

Ray McLennan

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