Debt Restructuring Companies: Solutions for Canadian Business Recovery | 7 Park Avenue Financial

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YOUR COMPANY IS LOOKING FOR  BUSINESS RESTRUCTURING FINANCE!

RESTRUCTURING AND TURNAROUND FINANCING SOLUTIONS

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Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

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EMAIL - sprokop@7parkavenuefinancial.com

 

 

 

 

"Debt is like any other trap, easy enough to get into, but hard enough to get out of." — Henry Wheeler Shaw 

 

 

RESTRUCTURING BUSINESS DEBT - SUCCESSFULLY!

 

 

A business debt restructuring loan. Many small businesses / medium-sized companies are often challenged to make key changes to their debt and overall capital structure to strengthen the business and allow growth.

 

Volatile times and today's business challenges require serious decisions from business owners/financial managers.

 

In many cases, businesses have already tried internally to address key financial issues relating to their business model, pricing, investment in inventory and accounts receivable, and staffing.

 

 

Is it all doom and gloom? Not necessarily!! ABL financing (asset-based lending) offers a strong solution for Canadian firms requiring restructuring. It's a solid method of leveraging your business asset base to reorganize your business financing.

 

There are, of course, many reasons for business loan restructuring.

 

 

Why does this type of financing suit the immediate needs of the business owner or equity investors? ABL looks at all the remaining business assets, including inventory, receivables, and fixed assets.

 

 

 Breaking Free From the Debt Cycle 

 

 

Overwhelming debt in the business can paralyze your company's growth and threaten its existence. Watching cash flow disappear into minimum payments each month while core business needs to go unmet creates mounting anxiety.

 

Let the 7 Park Avenue Financial team show you how providing Canadian businesses with expert navigation of debt solutions through financial challenges of debt payments with secured and unsecured creditors can create sustainable long-term survival in your financial situation.

 

  

Two Uncommon Takes on Debt Restructuring Companies  

 

1. While most businesses view debt restructuring as a last resort, proactive companies increasingly use these services as part of strategic financial planning—restructuring debt during periods of strength to optimize cash flow before problems arise in your debt situtation
2. Contrary to common belief, working with debt restructuring companies can actually improve relationships with suppliers and vendors by demonstrating professional financial management rather than indicating distress.

 

  

THE FOCUS ON LEVERAGING ASSETS   

 

Focusing on the business's assets, an asset-based transaction typically provides significantly more breathing room for the company and its financial obligations as it settles into a new stage of its life.

 

The ability to leverage these assets provides more liquidity at rates commensurate with the current overall credit risk.

 

  

 

BANKS RESTRUCTURING VERSUS ABL RESTRUCTURING   

 

 

While a bank solution for debt relief or turnaround financing might significantly emphasize cash flow / accrued interest, etc., the ABL facility assumes that assets are the key collateral.

 

This focus allows asset-based lending / the non-bank lender to supersede a more traditional banking solution, which is often unavailable due to the business's current state for a debt restructuring proposal.

 

Often unrecognized is the issue many bank workout managers are overworked to address properly, saving a business!

 

 

Financial institutions with diminished workout groups after being kneecapped in the manufactured credit cycle stretch. Larger companies are starting small-scale layoffs and restructurings.

 

 

  

 

  

ANY COMPANY OF ANY SIZE CAN BENEFIT FROM ABL FINANCE RESTRUCTURING      

 

 

The other benefit of an ABL asset-based business debt restructuring loan facility is simply that it's available to the SME sector of the market.

 

Larger or public corporations requiring restructuring tend to have access to business credit that only large-capitalization corporate firms can access at better interest rates. Companies in that, for example, 1-50 Million dollar range can view an ABL solution as their solution to restructuring.

 

  

  

WHY ABL FINANCING WORKS ON YOUR WAY BACK TO PROFITABILITY     

 

Firms in restructuring mode often focus on returning to breakeven and profitability.

 

The ABL solution is simply more patient in allowing them to do that. Since other financing models and business loans focus on cash flow/EBITDA, etc., the asset-based finance solution allows a firm with declining or lower cash flows to leverage the asset base for liquidity.

 

 

  

ABL FINANCE IS TYPICALLY NOT DEBT   

 

By the way, although we refer to this financial restructuring vehicle as a loan, it’s the monetization of assets, so there is no  ' pay down ' per se.

 

A Canadian chartered bank often pays out ABL restructuring solutions to return to profitability, growth, and a stable balance sheet.

 

 

The challenges for the business owners and the financial manager is significant regarding restructuring. 

 

 

It's all about cost structure, sales revenue, efficiencies, asset sales... or upgrades, and people issues.

 

These challenges require time, and an ABL financing solution can give your firm that time.

 

 

Case Study: Benefits of Debt Restructuring

 

A mid-sized Canadian production company specializing in custom metal components faced a perfect financial storm when three major clients delayed payments simultaneously. With $1.2 million in various business debts, including equipment leases, operating lines, and vendor accounts, monthly payments exceeded $45,000, consuming over 50% of available cash flow.

 

After engaging with a Canadian business financing advisor the company experienced immediate relief through a comprehensive approach. The restructuring team negotiated with equipment lenders to extend lease terms from 36 to 60 months, reducing monthly obligations by 40%. Their operating line was restructured with a 3-month interest-only period followed by a reduced interest rate, saving 4.5% annually.

 

Most significantly, the debt restructuring company established structured payment plans with vendors that prioritized critical suppliers while creating manageable terms for others. Within 90 days, the company's monthly debt service decreased to $27,000, freeing up $18,000 monthly for operational needs and growth initiatives.

 

The company not only avoided layoffs but expanded production capacity six months after completing the restructuring. Their credit profile showed improvement within one year, enabling them to secure new equipment financing at favourable rates for expansion.

 

  

KEY  TAKEAWAYS  

 

 

• Professional debt restructuring begins with a comprehensive financial assessment that evaluates your entire business debt structure against revenue patterns and growth projections.

• Creditor negotiation leverage represents the cornerstone of effective restructuring, with experienced companies maintaining established relationships with major lenders for better terms.

• Cash flow optimization drives successful restructuring programs through immediate relief measures and sustainable long-term payment arrangements.

• Interest rate reduction often delivers the most significant savings, with skilled negotiators frequently securing substantial decreases based on demonstrated payment commitment.

• Debt consolidation simplifies management by combining multiple obligations into single payments while typically lowering overall monthly outflows.

• Principal reduction negotiations may result in partial debt forgiveness when properly presented with accurate financial documentation showing hardship.

• Legal protection services prevent creditor collection actions during the restructuring process while formal arrangements are being negotiated.

• Credit profile preservation strategies differentiate professional restructuring from self-directed approaches that might damage future borrowing ability.

• Creditor communication protocols ensure consistent messaging that protects your business reputation throughout the restructuring process.

• Implementation timelines provide structured relief that addresses immediate concerns while building toward complete financial recovery.

  

 

 

CONCLUSION

 

Are there some solid takeaways when looking at your restructuring finance needs? 

 

We think there are, and they include the fact that this type of solution needs time to take hold, sales volume takes a while to regain stride, and the business owners and managers who are managing through the current situation need to be able to measure progress.

 

It's a solid working capital and business survival tool that will significantly improve your cash flow growth through loan restructuring methods and solutions.

 

Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor -  business debt professionals who can assist you in relieving the burden of a financial restructuring scenario via an asset-based ABL facility. That's a good debt advice solution!

 

 

 

  

FAQ FREQUENTLY ASKED QUESTIONS MORE INFORMATION PEOPLE ALSO ASK     

 

What is loan restructuring?

  

 Can banks restructure loans?   

How does debt restructuring work?