YOUR COMPANY IS LOOKING FOR RESTRUCTURING FINANCE!
FINANCING THE WORKOUT LOAN
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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LOAN RESTRUCTURING GUIDELINES AND SOLUTIONS
DEBT RESTRUCTURING OR DEBT REFINANCING - THERE'S A DIFFERENCE
Many Canadian companies find themselves domiciled in the town of ' Dire Straits '.
That’s when a 'relocate ' via restructuring loans and refinancing is in order. In certain other cases, extreme situations might exist whereby a Canadian chartered bank or other institution has in fact ' called ' their loan, putting them in the unenviable situation of being in what our banks call ' Special Loans ‘. And we'll promise to hold off on the humour around the word ' special '!
When a company is in need of financial assistance, it can resort to refinancing or restructuring. However, these processes are not always linked with business failure; but its
important to know what you're up against when facing challenges.
REFINANCING MUST TAKE INTO ACCOUNT ALL KEY STAKEHOLDERS IN THE COMPANY
When you consider your firm is either in, or a candidate for debt refinancing or debt restructuring that involves a focus that’s combined with what the finance folks call the ' stakeholders '. They include owners of the firm, lenders, and of course key suppliers. These situations are often dynamic and time-sensitive, further adding to the excitement! In some cases, management and an owner or new owner will have to address the financial situation with an outside board of directors.
WOULD YOU PREFER TO WORK WITH AN EXPERT?
What are some of the benefits of working with someone, or a team that is experienced in this area? Naturally finding an individual or a firm that is as serious about your turnaround as you are is key... it’s that ' people thing ' we hear about so often. You're looking for both technical synergies and of course... solutions around cash flow and business loans that make sense for your situation.
Naturally, the final outcome of any restructuring can be different. It could involve the sale of the firm, a partial sale of equity, or more simply, a refinancing of the business that addresses the key issues and problems.
ASSETS AND CASH FLOWS ARE THE KEY ISSUES
'Assets ' are key to turnaround and restructuring. Whether they are hard assets or perhaps future cash flows under the recurring revenue model it's all about keeping customers and injecting new cash flows into the business. Any final success on a solid lower interest rate will depend on the ability of the company to present a solid business plan and cash flow projection.
In some cases, a real estate refinancing might be part of a final solution, with options such as a bridge loan or commercial mortgage on the company-owned real estate premises. Those sought-after good interest rates are always reflected in asset quality and potential revenue and cash flow generation.
IS YOUR BUSINESS IN THE SPECIAL LOANS CATEGORY AT A BANK?
Lenders always want to avoid business failures, so those companies availing loan restructuring will usually have the support of banks and non-bank commercial lenders who do not want non-performing asses on their books and the negativity that comes with a failed restructuring of loans. So when it comes to loan structuring by banks that are always a sought-after potential solution.
Banks and commercial lenders do not desire loan defaults - so the ability to negotiate new financing and a capital structure that works best might include waiving interest, term extensions, altering payments, etc.
So what are some key elements required to get your firm out of ' SPECIAL LOANS ' and back into a day-to-day operating business cycle that you can live with .?
They might include asset sales, supplier term renegotiations, or financing of badly needed assets to sustain and grow the business.
There are some key things you can expect in any restructuring of your company. First of all, it usually takes longer than you think, a worst-case scenario regarding timing is never wrong to have in place.
FINANCING SOLUTIONS FOR DEBT RESTRUCTURING AND REFINANCING -
Financing solutions in Canada that work well with loan restructuring methods and special loans takeouts include :
A/R Financing
Inventory Loans
Access to Canadian bank credit
Non bank asset based lines of credit
SR&ED Tax credit financing
Equipment / fixed asset financing
Bridge Loans
Cash flow loans
Royalty finance solutions
CONCLUSION
The bottom line - restructuring and refinancing of any firm, small or large is rarely a fun cakewalk! But solutions exist, so seek out and speak to a trusted credible and experienced Canadian business financing advisor today for the experience and special attention that this challenge requires.
In some cases, a new loan scenario simply might reflect new financing to repay existing debt or to leverage new financing at more attractive rates and financial flexibility around the process of restructuring loans.
The process of debt restructuring is used when a borrower is unable to make has such financial timely repayment on their loan/debt. Debt refinancing, however, can be done much more broadly depending on the situation your firm is in. Debt restructuring is the more extreme option.
KEY TAKEAWAY - THE BOTTOM LINE
Debt restructuring and debt refinancing of any firm, small or large is rarely a fun cakewalk! While some solutions might be long term in nature more often than not a refinancing strategy is a bridge back to the road to traditional finance solutions so a term loan solution is not always the final strategy
Solutions exist, so seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor today for the experience and special attention that this challenge requires.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK /MORE INFORMATION
What is loan restructuring?
Loan restructuring is the process used by businesses to avoid a default on long-term or short-term current debts if a firm is affected by industry or general economic fallout. via a process of restructuring interest rates and debt structure - and in some cases a debt consolidation. A successful loan restructuring scheme via a lender or loan restructuring companies will involve a focused debt restructuring process to avoid further financial hardship and financial distress or insolvency/bankruptcy proceeding, with the goal to improve the overall credit score of the business. In some cases, outstanding interest might be waived by the lender around monthly payments. Other alternatives to loan options might be adjusting the maturity date of the debt around the adjustment of the company's payments. Debt restructuring can potentially affect business credit scores at credit bureaus.
What is the benefit of loan restructuring?
A debt restructuring proposal via a new loan agreement or other financing options by traditional financial institutions or non-bank commercial lenders helps eliminate financial difficulties encountered by a business. Creditor and lender negotiations can affect a monthly payment or accrued interest owing in a positive manner and help the firm return to financial stability and improve the business credit ratings of the company. Any debt relief options on the loan principal of the business benefit borrowers and the commercial lender - in some cases new debt might be an option for more money into the firm if cash flows support the financing.
Refinancing allows potential reduction of interest rates or loan consolidation around the current loan structure with a goal to free up cash flows to the business under more favourable conditions.
Can a bank restructure my loan?
When banks focus on reasons for loan restructuring they will want to carefully asses the impact of any refinancing on the future of the business - In certain cases moratoriums or a stay of proceedings will be entertained , as well as the past relationship with the bank on the business loan account or any personal loan or personal loans held by owner/shareholders. Banks place a strong focus on personal finance management of business owners.
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