10 Tips for Working with Business Owners Going Through Financial Transition

In my last blog, we talked about how business bankers and advisors to entrepreneurs understand that business founders are heavily invested in the success of their businesses, and often tie up their self worth and identity in those successes and failures.

In this edition and continuation, I’m sharing 10 tips to working with business owners going through a difficult business transition and help them come out with more clarity on the other side.*

• 1. Normalize the Emotional Process

  Tip: Acknowledge that financial distress can feel personal, even though it’s likely situational.

  Why it works: Business owners often equate their business’ financial trouble with personal failure. Recognizing this state without judgement helps them move into problem-solving mode.

  What it Sounds Like: “It’s completely understandable that you feel [angry/discouraged/frustrated] right now. Most people do when their back is against the wall!”

• 2. Label Emotion Rather Than Argue With It

  Tip: Give their feelings a name, instead of trying to combat them.

  Why it Works: Labeling emotions, like “frustrated,” “disappointed,” or “anxious,” can help engage rational thinking and reduce emotional reactions. It also builds trust and helps the client to feel seen.

  What it Sounds Like: “It sounds like you’re frustrated that the bank is pulling back at a time you need them more than ever.”

• 3. Shift Their Perspective

  Tip: Help business founders to see this as a setback, a phase, or a season, rather than a complete failure.

  Why it Works: Reframing the situation from crisis to a moment in time helps to turn their despair into ownership. It helps them to see the long-term instead of the right now.

  What it Sounds Like: “This isn’t the end of your business, it’s just a transition. Now we just need to find a finance solution that works for your business right now.”

• 4. Focus on What You Can Control

  Tip: Help the business owner shift from “what happened” to “what we can do about it.”

  Why it Works: When someone feels out of control, breaking action down into achievable steps helps them to regain some of their control.

  What it Sounds Like: “Let’s list what’s still working: your customers, your products and services, your team. Then, we’ll build from there.”

• 5. Balance Empathy with Structure

  Tip: Empathize with their situation, but keep things moving.

  Why it Works: Too much empathy with their situation without action can feel like pity. Too much action without empathy can feel disconnected. Balancing both creates trust.

  What it Sounds Like: “I know this feels overwhelming. Let’s review three options together and decide which one feels acceptable for you?”

• 6. Avoid Taking it Personally

  Tip: Their frustration is real. But it’s not about you (hopefully!).

  Why it Works: If you stay grounded in reality and not emotion, you become the calm, trusted presence in their turmoil.

  What it Sounds Like: They may lash out, but remember it’s about the situation, not the messenger. Refer back to #5.

• 7. Offer Hope, But Not False Optimism

  Tip: Create optimism and hope around their options and the process, but not guarantees.

  Why it Works: Business founders can see right through false promises. Hope through options earns respect.

  What it Sounds Like: “You still have options! Now we just have to find the right fit and you may need to make some hard choices that get you back to where you want to be.”

• 8. Bring in the Right Partners Early

  Tip: Don’t try to shoulder the situation solo. Collaborate with other pros - ABL lenders, turnaround consultants, valuation experts, alternative lending specialists - early and often.

  Why it Works: Letting specialists do their jobs while everyone has a common goal creates more viable solutions, while signaling professionalism and confidence.

  What it Sounds Like: “We’ll bring in a couple of partners who can help us refine the details and find the best options. You’re not in this alone.”

• 9. Help Them Look Forward

  Tip: Use achievable milestones instead of abstract goals.

  Why it Works: Defining a structure creates small wins and helps show progress, even when it’s a long road to success.

  What it Sounds Like: “First, let’s stabilize your financing. Then, we’ll address your debt structure. Finally, we’ll improve your cash flow, return to profitability and then prepare for future growth.”

• 10. End Every Interaction with Direction and Dignity

  Tip: Regardless of how tough the conversation was, close it out with clarity and encouragement.

  Why it Works: It positions you as more than an advisor. You’re the steady hand that’s guiding them through the foothills toward higher ground.

  What it Sounds Like: “We have a plan. You’re not the first business owner to face this, and you won’t be the last. The key is that you’re taking action now.”

These ten tips are rooted in psychology, and are based on experience. If you need a partner who specializes in alternative financing, reach out and let’s connect.

*I’m not trained in psychology and this is not medical advice; these tips originate from professional reading, relevant books and articles and research using Chat GPT and other AI tools.