credit insurance benetits

Wade Park: A $2 Billion Reminder to Beware the Sure Thing

Credit insurance benefits your business in four key areas

In an area of opportunity such as Dallas, you’re always going to have some chances taken that don’t pan out. Wade Park appears to be firmly in that category.

As failing developments go, it doesn’t get much bigger. Thomas Land & Development, an Atlanta-based organization, originally brought the concept to Frisco in 2014. It was to be 175 acres of office, high-end retail, and apartment living. The overall investment quoted to the Dallas Morning News: $2 billion. 

Where is it today? If you live in the area, you don’t need an answer to that question. You can simply drive by it and see. But if you don’t, here’s a quick up-to-speed. 

The Fall of Wade Park

The development was supposed to open to the public in the first quarter of 2015. It wasn’t going to be fully open, but residents would start seeing tenants such as Starbucks, iPic Theatre, and Whole Foods Market crop up. That momentum would eventually fill out the living spaces and encourage corporate relocation to high-rise buildings within the area. 

Unfortunately, the spring of 2015 passed, and Wade Park remained an unfinished dream. Soon, plumbers, concrete producers, construction companies, and other contractors began complaining of unpaid bills. Thomas Land would eventually default on $130 million in debt. The excavation was suspended in 2017 as a result, and that prompted lenders to start looking at possible foreclosure.

The DMN article linked above paints a pretty pessimistic picture of what comes next for Wade Park. And here’s the thing: it may not be getting any better for the area as most economists expect the current Dallas boom to be over by the year 2020. That gives Wade Park a very small window to turn around its lack of progress. It also serves as a warning to any business that may be in on a “sure thing” that has yet to pay off. 

Hedging Your Bets

While it would be nice if you could count on established companies and businesses to do what they say they’re going to do, reality doesn’t always play out that way. We’ve covered some rather high-profile bankruptcies and misfires on this blog in the past. When deals fail to materialize, it can leave smaller companies that depend on the cash flow with nothing to show for the work they put in on a show of faith. 

Fortunately, there are ways you can hedge your bets if you fear non-payment. One in particular — purchasing credit insurance — is worth considering because it allows you to know for certain that your company and workers will be paid should any snag arise in the business transaction. 

Credit insurance benefits your business in four key areas. We’ll now look briefly at each one. 

1. Sales Expansion

When you’re covered by credit insurance, you give your company the opportunity to expand the sales base and open up to more speculative possibilities. Possibilities you may not ordinarily consider. A certain degree of risk is always present in business and always necessary if you hope to grow your footprint. CI tears down the most common barrier that keeps you from taking risks: the fear of not getting paid. 

2. International Sales Growth

Just to piggyback off the last point, international sales is a particularly intimidating game for many smaller companies and startups. The apprehension is easy to understand. Resources are limited. You’re probably not comfortable with the country of origin. There may be communication challenges. In many cases, you’ve never brokered a pond-crossing deal. A lot could go wrong. Credit insurance allows you to loosen up. 

3. Decreasing Debt Burdens

In the Wade Park case, contractors victimized by the default have an uphill battle. They likely had to take on debt to deliver the promised services until the money came in. When Thomas Land went AWOL on the $130 million, it created a lot of bad debt for these smaller companies. But if a company thought to purchase credit insurance ahead of time, they would be compensated as the fate of the development plays out among its two major lenders. 

4. Getting Better Terms

Purchasing credit insurance before signing on the dotted line signals to a bank that it can depend on you to have the financial resources necessary. They see you’re able to continue servicing the loan in the event of an unforeseen financial hangup. That makes them more comfortable with setting more favorable repayment terms from the outset, which means better rates, better payment periods, and lower overall installments. 

Beware the Sure Thing

Success in business demands creativity and a certain degree of optimism. You need to go into every transaction thinking it will work out. But don’t do it blindly. Beware of the sure thing, and use the resources that are available to guard against the worst-case scenario. If you’re not sure how to do that, then get started by visiting our Southlake office or contacting us online or by phone. We’re happy to answer questions about credit insurance benefits or help in any way we can. 

Credit Insurance Benefits

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