Proactive, effective communication between lender and borrower can help build a strong relationship that weathers any storm.

When your small business is doing well, keeping in touch with your sources of capital seems easy and simple; never uncomfortable. You’re ready for the calls, and excited to share the good news. Every small business faces struggles, however, and how you handle those challenges can have a major impact on the success of your business.

Capital providers and lenders require an open line of communication between themselves and their borrower. Proactive communication of both good and bad news can help small business owners build stronger relationships with their lenders. Obviously, your capital providers love to see your business succeed, but when things do get tough, how you communicate this bad news will directly affect your relationship. Forbes offers small business owners some tips on how to effectively communicate bad news.

• Never surprise your capital providers. If you see foresee an impending impactful situation for your business, make them aware so they can adequately prepare just as you are.
• Never delay the delivery of bad news because equity investors and lenders need to know that you are consistently keeping them in the loop.
• Never hide the facts. Withholding information can prevent you from working together to find a solution to your problem.
• Put it in writing. You should be documenting all conversations with your capital providers, and your delivery of bad news is no different.
• Justify the situation you are in, and present a list of solutions your business has come up with to fix the problem.

Here at Wellen, we bring much more to the table than capital alone. Our management team collectively has decades of finance industry experience. We have seen businesses of every size come and go, and our expertise in working closely with the owners directly ensures the best possible outcomes. We have been able to help businesses facing tough times and support them through turnaround efforts that can boost sales and productivity. Building solid, working relationships with our customers is crucial for us to provide the best support we can, and all of that depends on transparency. Whether you’reall of that depends on transparency. Whether you’re all of that depends on transparency. Whether you’re delivering good news or bad, we must be aware of it—a fact that holds true for any business relationship.