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Insights

How a Helpful Approach to Credit can Benefit Borrowers & Lenders Alike

At Star Strong Capital, we have spent years working to define our unique position in the market and illustrate our ability to support the growth of a business. It's taken us time to understand where we can be genuinely supportive and helpful to borrowers. We have learned a great deal, including just how much the success of a business is dependent on two unique factors: the intangible aspects of the person running the company (often the founder) and the tangible complex numbers.


Borrowers often come to us seeking funds for any range of needs. It is a vulnerable process, often requiring a deep dive into historical pain points, challenges, and unattained achievements in their business. With other lenders, borrowers complete checklists and submit applications as part of a formalized, impersonal, and non-emotional process. Numbers often lead to the ultimate investment decision.


At Star Strong, we approach our investment decisions through the lens of the human. We focus on how we can be helpful and help the founder achieve their goals and business objectives. When considering ROI, there are only two critical data points: (1) What cash do you have available now, and (2) can we work together to achieve your goals?


When we lead with a compassionate mindset, we can engage directly and more deeply with business owners and founders to understand their goals and ambitions and learn what is most important to them as they grow. By establishing direct dialogue and developing a cadence of open communication, we can serve as a holistic and rounded growth vehicle to collectively support their business, all with respect and mutuality that only comes when a relationship is established. We recognize and respect the company's importance in the founder's life and the market. Beyond simply lending capital, our goal at Star Strong is to solve for the business's long-term health and, to that end, attempt to understand how the financing will enable those goals to be met.


At Star Strong, we lead by understanding the inner workings of the business beyond the balance sheet and striving to understand the motivations of the individuals leading the organization. We ultimately benefit from this approach as it leads to better decisions that limit risk and yield a more realistic understanding of the borrower's ability to repay the loan. With greater insight and access to the company's performance throughout the relationship, we can intercede early on should red flags emerge and help troubleshoot to navigate issues that might imperil future payments.


At the same time, we are seekers of information. Learning about each borrower's business and leaning into the businesses we invest in helps us see a fully diversified landscape. We can collect valuable information, best practices, and methodologies that can be applied to other borrowers in similar circumstances.


Not all borrowers or founders want the hands-on and service-oriented approach of Star Strong or some other lender that adopts this unique approach. Those who do choose this route benefit from access to a partner deeply committed to the success of the business and one that provides consultative benefits through sharing of insights, learnings, and best practices from across their portfolio. It is our goal to focus on a 'collaboration first' approach. That is why determining whether we can work with the person is a critical part of the process when selecting a business to work with.


As part of the diligence process, we work to understand the intimate and core details of each borrower's business. We ask ourselves if we can be helpful by supporting the company with a capital infusion and leveraging our network, fellow portfolio companies, etc. We look to partner with companies that want to be part of our Star Strong family and will benefit from our unique knowledge base.


Now, numbers do matter. Our approach recognizes the importance of those complex financials and critical checklists. When we consider more than just the borrower's financial composition and take a more open and understanding approach to the relationships we form, the results can benefit all parties involved.


SSC


The performance quoted represents past performance. Past performance does not guarantee future results.


Not all investments made by Star Strong Capital LLC should be expected to be profitable.


The information and opinions provided herein should not be taken as specific advice on the merits of any investment decision. Investors should make their own decisions based on such investors’ own review of publicly available information and should not rely on the information contained herein.


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