Gershen, Robert D.1
(1) Longview Energy Company, Dallas, TX
ABSTRACT: How Much Should I Borrow? Reflections of a Lender Who Went Straight
Being able and willing to understand the motivations and expectations of your capital
provider is a key component in successful capital formation. The deal isn’t done when
you get the money – but when you give it back.
As a lender, the author has provided several hundred million dollars in financing to more than two dozen independents. In the last two years he has switched sides from a lender to a manager of a failing company in Dallas. In his new role he has closed two new financings with two very different capital providers, paid off a defaulted bank loan and returned a small independent to profitability. The author maintains that the mismatch in risk tolerance and expectations between a company’s capital provider and its project manager is the primary reason for the failure of many independents. He will discuss his experiences on both sides of the borrowing/lending equation.
AAPG Search and Discovery Article #90026©2004 AAPG Annual Meeting, Dallas, Texas, April 18-21, 2004.