The power of saying no – Wilson

So, how then do you decide whether a deal should be done in the first place? In reality, I think we often don’t know at first glance. A proposal may land in your inbox with numbers that appear workable and an exit that sounds plausible, and at that point, there may be little to suggest otherwise.

Yet, a few months later, that same deal can begin to unravel. Were the warning signs there from the start, or did they only become visible with time? We can’t always prove it either way. But that uncertainty, in itself, is where the problem begins, because it’s precisely what allows weaker decisions to pass through unchecked.

In parts of the specialist lending market, volume has long been taken as a sign of strength, where more deals are seen to mean more momentum and, by association, more growth. That’s the underlying assumption, and for a long time, it largely went unchallenged. However, as we find ourselves in a slower and more uncertain market, that assumption begins to look far less convincing than it once did.

For me, and I think this is where the conversation needs to move, good underwriting is defined just as much by the deals that are turned away as by the ones that proceed. At the time, the discipline to say no rarely feels like progress, particularly when it does not show up in completion figures or immediate output. Over time, however, we start to see its real value, especially when weaker deals begin to come under pressure while the stronger ones hold up as intended.

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The problem with easy decisions

Even now, there are still models in the market that favour speed over scrutiny, where, if a deal fits within a set of parameters, it moves forward with relatively little resistance. On the surface, that approach can appear efficient, with processes running smoothly and timelines being met, and from the outside, it can look like a well-functioning system. In a slower market, where momentum can be difficult to generate, I understand why that kind of flow can be hard to resist.

However, if the underlying deal is not as strong as it first appears, then moving quickly at the outset does not remove the risk, it simply pushes it further down the line. What looks like progress in the early stages can, over time, become something far more difficult to manage, often at a point where the options available to resolve it are far more limited.

We have all seen where that approach can lead. Growth without sufficient control. Due diligence replaced by process. Decisions made because they can be made, rather than because they should be. In these situations, issues do not always present themselves immediately. Instead, they build gradually, often out of sight, until they reach a point where they can no longer be contained.

So, the question is not whether a deal can be made to fit. The question, more importantly, is whether it should be.

Saying ‘no’ is not negative

It is easy to see a declined deal as a missed opportunity, and in a cautious lending environment, that instinct only becomes stronger. With fewer deals available, each one carries more weight, and we can all feel that pressure to proceed at times.

However, turning down a deal that does not hold together is not a loss. It’s a decision that avoids a more difficult situation from emerging later. It protects capital, supports better outcomes for borrowers, and helps to maintain trust in a market where that trust is not always guaranteed.

The aim, therefore, is not to avoid lending altogether, but to be selective about where we lend and, just as importantly, why. Where there is a substantive route to repayment, and where the structure holds up under scrutiny, those are the deals worth supporting. Everything else requires a different conversation, and often, a more cautious approach.

A long-term view

In more challenging conditions, the difference between lenders becomes increasingly visible. It’s relatively straightforward to say ‘yes’ when conditions are favourable and liquidity is strong. The more difficult decision, however, is knowing when not to proceed, particularly when lenders are under pressure to deploy capital and maintain momentum.

These decisions do not always show their impact immediately, and in many cases, they take time to fully play out. Nevertheless, they shape outcomes in a way that becomes difficult to ignore. The deals we decline early are often the ones that would have created issues later, while the deals we support, where the structure and exit align, are the ones that tend to hold up over time.

That’s not a coincidence.

Underwriting is not just about getting money out of the door, it’s about ensuring that it returns as expected, without unnecessary complication. In the current market, that discipline is not what slows things down. It’s what stops things going wrong.