In August of , a man named Cyrus West Field stood on the deck of the HMS Agamemnon and watched a thick, tarred rope disappear into the black Atlantic. It was the first successful telegraph cable connecting the Old World to the New.
When the first message from Queen Victoria finally reached President James Buchanan, it took to transmit ninety-eight words, but the world didn’t care about the lag. They cared about the miracle. New York City erupted in a frenzy of fireworks and parades; people toasted the death of distance.
Field was hailed as a conqueror of the sea. But while the crowds were still sweeping up the confetti, the signal was dying. Three weeks later, the cable went dark. The celebration had been a grand, expensive funeral for a connection that hadn’t actually stabilized. Field had won the race, but he hadn’t secured the line.
We do this every day in the world of high-stakes finance. We mistake the signal for the current.
The Friday Night Mirage
Isabel stood in a dim corner of a steakhouse on a Friday night, the condensation from a glass of overpriced gin cooling her palm. She had just signed a term sheet for a $12.4 million acquisition loan. Her co-founder was already talking about the new hires they would announce on Monday.
They felt the weight of the world lift. To them, the term sheet was the finish line-a binding promise that the money was on its way. They were spending the relief before the wire had even been queued. By the following Wednesday, the hangover wasn’t from the gin; it was from a fourteen-page document titled “Conditions Precedent.”
Isabel’s milestone was a figure on paper, yet treated as a deposit in the bank.
The term sheet is the most dangerous document in a buyer’s journey because it wears the mask of a resolution. It feels like a “yes,” but in the cold light of the credit committee, it is merely an invitation to keep proving you aren’t a liar. It is a list of hurdles disguised as a handshake.
Buyers treat it like a trophy, while lenders treat it like a hypothesis. And as Isabel soon discovered, the distance between that Friday toast and the actual drawdown of funds is a graveyard of deals that looked perfect on paper.
Lenders, particularly in the private credit and structured finance space, are not in the business of trust; they are in the business of verified skepticism. The moment that term sheet is signed, the relationship shifts. You are no longer talking to the “origination” person-the charming, suit-wearing optimist who sold you on their fund’s flexibility.
You have been handed over to the “risk” side. These are the people who do not care about your vision or the “synergies” you’ve mapped out in your pitch deck. They care about the lease assignment on a warehouse in Dubuque and whether your tax filings have been stamped by the right department.
The Dry Down of a Deal
Logan S., a fragrance evaluator who spends his life dissecting the evaporative rates of expensive chemicals, once explained the phenomenon of “the dry down” to me.
“The top note is just the handshake; you don’t buy the bottle until you know how it smells after six hours of sweat.”
– Logan S., Fragrance Evaluator
A term sheet is a top note. It smells like success and expensive leather. But the dry down of a deal-the phase where the conditions precedent must be met-is where the real scent of the transaction emerges. If the documentation is weak, the smell turns sour very quickly.
I spent yesterday morning rehearsing a conversation with an imaginary underwriter named Marcus. In my head, I was eloquent. I was firm. “Marcus,” I said to the empty passenger seat of my car, “the inventory audit is 92% complete. We aren’t going to delay the closing because of a three-day lag in the third-party report.”
In reality, Marcus doesn’t care about my rehearsal. He cares about the box on his screen. If the box isn’t checked, the wire doesn’t move. This is the psychological trap of the acquisition entrepreneur. You spend months hunting the target, weeks negotiating the LOI, and days haggling over the interest rate spread.
The Buyer’s View
Exhausted, emotional, seeking partnership, future-staked.
The Lender’s View
Transactional, bureaucratic, loss-protected, pipeline-focused.
By the time the term sheet arrives, you are exhausted. You want to believe the hard work is over. You want to believe that the lender is your partner. But a lender who has issued a term sheet loses nothing if you fail to meet a condition precedent. They have a dozen other deals in the pipe.
The Velocity of Disillusionment
You, however, have your entire future staked on this specific 1s and 0s moving from their account to yours. The reality of the current market is that credit has become more disciplined, which is a polite way of saying it has become more bureaucratic.
Average Days to Close (Market Shift)
A term sheet that would have closed in twenty-one days three years ago now takes forty-five. Every “subject to” clause is a potential trapdoor. “Subject to satisfactory legal due diligence.” “Subject to environmental Phase I clearance.” “Subject to the assignment of key man insurance.”
They show up with “clean enough” books and “mostly finished” contracts. They assume the lender will be reasonable. But “reasonable” is not a metric that fits into a risk memorandum. To bridge the gap between a signed term sheet and a funded deal, you need more than a good business; you need lender-grade execution.
This is where most entrepreneurs stumble. They are great at running their companies, but they are terrible at being their own bankers. They don’t realize that the way you present a risk is often more important than the risk itself.
If you are waiting for a wire that hasn’t come, you are likely stuck in the “technicality” phase. This is the stage where the deal doesn’t die because the business is bad, but because the documentation is messy. Lenders hate mess. They want to see that you have anticipated their questions before they even ask them.
Beyond the Maybe
This requires a level of transaction packaging that most small to mid-market buyers simply aren’t equipped to handle. This is why structured finance advisory exists.
A firm like Financely doesn’t just find you a lender; they prepare the “lender-grade” documentation that ensures the term sheet actually turns into money.
They understand that a term sheet is a fragile thing. It is a “maybe” that needs to be protected with disciplined execution. They know that the credit committee is looking for reasons to say no, and the only way to get to a yes is to remove every possible excuse for a delay.
The Management of Momentum
When you have a deal in motion, you are essentially a manager of momentum. The signed term sheet creates a massive surge of momentum, but if you hit a wall of conditions precedent that you weren’t prepared for, that momentum doesn’t just stop-it reverses.
Your seller starts to get nervous. They wonder why the money hasn’t arrived. They start looking at backup offers. Your employees sense the tension. The “relief” you felt on Friday becomes the “dread” you feel on Tuesday. The wire that never comes is usually the result of a deal that was “sold” but not “structured.”
If the structure is weak, the term sheet is just a piece of paper. It is the telegraph cable all over again-a brief moment of connection followed by a long, expensive silence.
I remember watching Isabel three weeks after that steakhouse dinner. She wasn’t toasting anymore. She was sitting at her desk, surrounded by stacks of paper, trying to figure out why the bank was asking for a certificate of good standing for a subsidiary she had closed in .
She looked older. The excitement of the “win” had been replaced by the grind of the “close.” “I thought we were done,” she whispered.
But in private credit, you are never done until the ledger balances and the bank’s confirmation number hits your inbox. Everything else is just noise. The most successful buyers I know are the ones who treat the term sheet with a cold, clinical detachment.
Earning the Wire
They don’t celebrate. They don’t call their parents. They don’t buy the new car. They simply look at the list of conditions and start the slow, methodical work of ticking the boxes. They know that a promise hedged with conditions is not an answer; it is a test.
The ink on a signature is never as heavy as the silence of an unarrived wire.
If you want the wire, you have to respect the process that precedes it. You have to understand that the lender is looking for a reason to protect their capital, and your job is to make it impossible for them to find one.
This means having your risk memoranda, your covenants, and your documentation aligned with the lender’s expectations from day one-not day sixty.
Cyrus West Field eventually succeeded. He went back to the Atlantic. He lost more cables. He lost more money. He spent years in the silence. But he eventually realized that the miracle wasn’t the cable itself; it was the engineering required to keep it from snapping under the pressure of the deep.
Your deal is under pressure. The term sheet is just the cable being lowered into the water.
If you haven’t engineered the rest of the transaction to survive the “conditions precedent” at the bottom of the ocean, don’t be surprised when the signal goes dark before the money arrives. Stop celebrating the handshake and start preparing for the dry down.
The wire is coming, but only if you have the discipline to earn it.