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Capsizing is good? Yes, but learn from it and then come on up!

[This post is part of a series on business…for business owner/managers and their lenders.]

On my first open-water practice paddle in the sea kayak class, I capsized. It was not planned. It was not supposed to happen. It happened in the first ten minutes. Truthfully, I cannot even tell you exactly what I did wrong.

Capsizes are sudden and always unexpected.

Thumbnail image for Thumbnail image for BankerKayakWhiteBackgroundSmall.PNGCapsizing builds confidence
In a very strange sort of way, it was a confidence-builder. I had learned what to do in a capsize and had even practiced it. But capsizing accidentally in a very cold lake is an entirely different experience than on purpose in a heated pool surrounded by instructors.

I learned that I really did know what to do. After that first frantic (but not panicked) moment, the five steps to a ‘wet exit’ came to me.

  • Lean forward
  • Pull the spray skirt strap forward then up
  • Drop out of the kayak
  • Grab your paddle and kayak on the way up
  • Clear the water and breathe!

Hire experience if you can
If you have less experienced members of your business team, you can plan and talk all you want, but until the emergency hits, you just don’t know how you’ll handle it. That is why in these economic conditions hiring experienced people who have been through a down-turn may be a good move.

If you need to negotiate with your lender
Recognize that the lender you usually work with may also be unused to rough waters. In the past, business borrowers with a challenge were passed off to the ‘special assets’ team. Those are the most experienced lenders and in fact, sometimes it was the best thing that could happen to you. They were skilled at looking at the business and assessing what steps might be helpful in improving your situation.

Fact is, now there are just too many swimmers in the water. If you are getting ready to miss the mark on one of your loan covenants, or need to request a restructure of your business loan, you may not be working with the specialized ‘work-out’ lenders. Be ready to ask more questions and have the process take longer.

No need to stay under water
Building self-confidence and getting another chance to practice a rescue is great. But no one wants to stay underwater. Roll on up or ‘wet exit’ and climb back in. Learn from the capsize, share the lessons with your colleagues and get back to paddling.

About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at, she speaks at banking associations on risk management, lending and director finance topics.