Whose Money It Is

Read the bank's letter as the shareholder it was not written to, because it tells you something the MD's email does not. When a lender funds the season at last year's peak and declines the increment as a bet, it has told the shareholders whose money the increment is. Yours. That is the correct allocation: bets are what equity is for, and a bank that funded this one would be a partner in a gifting retailer on a lender's margin. The bank has not obstructed the company. It has sorted the request into the part it should carry and the part you should, and it has told you how it would be persuaded.

The advice, in the shareholder's chair, is B. Put it in against evidence. The bank has already named the evidence: confirmed pre-orders from the trade customers. Fund the part of the US$900k that pre-orders cover, now, so the winning categories ship; hold the rest as a second call in mid-November, for reorders of what the first weeks show is selling. You are the lender of last resort to a merchandising conviction. Ask for what any lender would: the same evidence the bank asked for, and a date.

Putting it in because it is your company, D, is funding the whole conviction blind, with your money instead of the bank's, on the same file the bank declined to read as demand. The MD may be right. The file cannot show it, and you have exactly the information the bank had, plus an email that calls the evidence a slow road.

Refusing outright, A, turns the bank's discipline into the company's paralysis; the season still ships, and a merchant with a real insight and no way to fund it is a merchant who will find worse money. Lending it as shareholder debt with security, C, ranks where the bank says it ranks, behind the bank, and dresses a bet as a loan without changing whose money is at risk.

When the bank calls it a bet, it has told you whose money it is. Yours. Ask for the same evidence the bank asked for.