Insights · Advisory

Representation on the borrower's side: what a debt advisor actually does

Certus Credit · 9 November 2026 · 5 min read

The owner of a $9M distribution business has financed it four times in twenty years. The credit officer across the table has done it four hundred times. That gap is the reason a debt advisor exists. We sit on the owner's side of it and close it.

What follows is the work, in the order it happens.

Who it is for

Operating businesses raising above $2.5M, into the $75M range. Distributors, contractors, manufacturers, staffing and logistics companies, service businesses with payroll, receivables and equipment behind them. The need is a refinancing, working capital, equipment, the consolidation of merchant cash advances, or an acquisition.

Above $2.5M the bank stops being the whole market. There are asset-based lenders who lend against receivables and inventory, term lenders who lend against cash flow, equipment lenders, and private credit funds, and each one has a written box: size, sector, collateral, geography, and the things that end a file on sight. An owner who has only ever borrowed from one bank has met none of them. Knowing which box a given business fits is most of the job.

The assessment

It starts with an assessment call. We go through the business, the existing debt and what the money is for, and the call ends with a plain answer: this is a file we can work, or it is not.

Sometimes it is not. A company with eighteen months of history and a thin balance sheet will struggle at any size. An owner who needs the money by Friday is not a candidate for a process that runs on lender diligence. Saying so at the outset costs nothing and saves everyone a month.

The file

If the answer is yes, the work is the file. This is the part owners underestimate.

A credit officer reads the file before they hear the owner. It holds the debt schedule, the trailing twelve months, the interim financials by month, the receivables aging, the use of proceeds and a one-page summary, organized the way an underwriter reads them rather than the way the bookkeeper exported them. Every figure in one document has to agree with the same figure in the others, and where it does not, the file carries a short note saying why.

Most of the delay in a financing comes from skipping this. The lender asks a question, the owner spends a week finding the answer, and by the time it comes back the officer is three files further down the queue. A complete file removes the questions before they are asked.

Lenders whose mandates fit

Lenders tell us how they underwrite, and we keep that as their mandate. When the file is ready it goes to the two or three lenders whose mandate it fits, with a short note on why, and nowhere else. A lender who does asset-based facilities between $3M and $15M for distributors in the Midwest receives a file that is exactly that. They never see the restaurant group, or the acquisition in a sector they have never touched.

The owner approves the lender list before any approach is made.

Three term sheets

Term sheets come back, and they are rarely comparable on their face.

Take a distributor doing $8M a year with $1.4M of receivables and $600,000 of inventory, raising $2.6M to refinance a bank line and a maturing term loan. Three sheets arrive.

The first is a receivables-only line at an 85% advance rate: $1.19M of availability, priced at prime plus 2.5%, no personal guarantee. The second adds inventory at 50%, so availability is $1.19M plus $300,000, or $1.49M, priced at prime plus 3.75% with a personal guarantee. The third is a $2.6M cash-flow term loan over five years at 11.5%, a payment of about $57,200 a month, with a fixed-charge coverage covenant of 1.25x that the business clears at 1.31x on last year's numbers.

The first sheet is the cheapest and leaves the business $1.41M short of what it needs. The second gets closer and costs a guarantee. The third covers the ask and leaves the least headroom, because one slow quarter puts the covenant at risk. None of the three is the best sheet in the abstract. One of them fits how this business earns and spends money, and the work is lining them up so the owner can see which one before anything is signed.

The close

After the choice comes the close, and the close is where processes stall. Diligence lists, legal, payoff letters on the existing debt, lien releases, the funding mechanics. The advisor runs that calendar. The owner runs the company.

Scope

Every engagement is defined in scope and set out in writing before any work starts: what the firm does, what the borrower provides, and how the lender process is run.

When you do not need one

If your bank has said yes on terms that fit, take them. If the amount is under the floor, a managed process costs more time than it saves and a simpler route is better. If the business has a CFO who has run three lender processes in the last five years, that person may do this better than anyone outside the company. And if the money is needed this week, this is not the route. Lenders take weeks, and no advisor changes that.

What representation means

The firm works for the business raising the money, not for the lender providing it. Credit decisions rest with the lenders. The file, the lender selection, the negotiation and the close are our work, done for one party.

If you are raising above $2.5M and want a plain read on whether a managed process fits, the enquiry at certuscredit.com/apply asks about the business, what it owes and what the money is for. We will tell you where it stands.