YOUR COMPANY IS LOOKING FOR REFINANCING!
RESTRUCTURING AND TURNAROUND SOLUTIONS
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
70% of Canadian SMEs cite cash flow as their top financial challenge—BDC 2024”).
Your Business Isn't Dead—It Just Needs the Right Financial Lifeline
Turnaround financing and business refinance solutions are often essential when a company faces a sudden liquidity crunch after a period of growth.
Turnaround finance typically involves restructuring one or more loans while improving business performance. It’s all about fixing your business and restoring financial health while eliminating cash flow challenges. Let’s dig into the restructuring finance process.
Breaking Free from Financial Crisis
Your business is bleeding cash, creditors are circling, and traditional banks have already said no.
The stress of potential closure keeps you awake at night while you watch years of hard work slip away.
Let the 7 Park Avenue Financial team show you how Turnaround financing provides the capital injection and restructuring expertise needed to stabilize your operations, negotiate with creditors, and rebuild your company's financial foundation—giving you the breathing room to focus on what you do best.
2 UNCOMMON TAKES ON TURNAROUND FINANCING
- Turnaround financing is less about money and more about buying time—the real value lies in the strategic pause it creates, allowing you to restructure operations without the constant panic of imminent closure
- Most businesses that need turnaround financing and business restructuring waited too long to ask for it—the ideal time to seek this funding is when you first see the warning signs, not when you're already in crisis mode.
Don’t Get Caught Off Guard in a Liquidity Crisis
Well-managed companies with a proper business plan and cash flow forecast are rarely caught off guard by a liquidity crisis—pandemics excluded.
If your management team lacks experience, seek professional help immediately to avoid potential insolvency. Completing your turnaround through restructuring and financing can restore stability and credibility with lenders and stakeholders.
Timing Is Critical in the Turnaround Effort
Financial recovery is time-sensitive. Selecting and working with the right turnaround finance partner is priority number one.
Each industry has unique financing needs, and you need a firm with a proven track record of business financial success.
Experts such as KPMG outline a three-phase restructuring model:
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Strategic recovery: Address the overall direction and market positioning.
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Sales and profit recovery: Restore profitability through operational improvements.
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Liquidity recovery: Resolve cash flow issues through funding and asset optimization.
Maintaining Sales and Continuity Is Key
Turnaround challenges are especially difficult for small and medium-sized enterprises (SMEs).
New equity or owner capital is often unavailable, so the recovery must be financed through operations. Maintaining sales and improving profit margins are critical to resolving cash flow problems.
Owners and managers should analyze the root causes that led to distress, such as:
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Declining sales or customer concentration
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Excess costs or inefficiencies
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Weak management or employee performance
Watch for Key Warning Signs of Business Distress
Warning signs that indicate financial distress or poor finance strategy include:
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Inability to acquire needed assets or inventory
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Difficulty meeting fixed costs such as rent and utilities
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Loan or lease defaults requiring restructuring
Early identification of these issues allows corrective action before insolvency becomes unavoidable. Timely cash flow management can prevent formal proceedings.
Lenders, Management, and Advisors: Working Together
During financial distress, collaboration between all stakeholders is vital.
That includes:
A skilled management team may implement internal fixes, but outside help is often necessary. Acting early preserves flexibility and lowers costs while negotiating with creditors.
Implementing a Restructuring Plan and Refinancing
Owners and financial managers must address key operational areas during a turnaround, including accounting, administration, and working capital.
Timely, accurate financial reporting and cash flow forecasting are crucial for both owners and lenders.
Accelerate collections, review inventory turns, and assess the true value of your inventory—particularly for production goods.
"In the middle of difficulty lies opportunity." – Albert Einstein
Understand Your Cash Conversion Cycle
A company’s cash conversion cycle tracks how quickly cash moves through operations—from purchasing inventory to collecting receivables.
Solving cash flow problems starts with shortening that cycle. If internal solutions are insufficient, evaluate external financing options through existing or new lenders.
Cash management should be the top priority during turnaround planning.
Accelerate Accounts Receivable Collections
One of the fastest ways to improve liquidity is through accounts receivable financing, also known as factoring.
At 7 Park Avenue Financial, we recommend confidential receivable financing, which allows you to bill and collect receivables while generating immediate cash flow from your sales.
Avoid Formal Insolvency Proceedings
When a bank places your account in “special loans” status, negotiate a forbearance agreement to gain time for restructuring. Avoiding formal insolvency preserves business value and control.
Quick Cash Infusion Strategies
Two proven short-term financing tools include:
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SR&ED tax credit financing: Monetize your research and development tax credits for working capital.
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Sale-leaseback financing: Unlock cash from owned equipment or real estate while retaining operational use.
Cash conservation and prudent debt management are essential during recovery.
Case Insight: The Story of Henry Frick
There is a great story here at 7 Park Avenue Financial about a fellow named Henry Frick -
In 1871, he borrowed through good and bad times to acquire and grow businesses.
His secret? It might well come from the actual written banknotes from Thomas Mellon of Mellon bank - a bank U.S. money center bank.
Those notes? They read : ' land is good ... the ovens are well built, manager on the job all day... keeps books in the evening... knows his business! At 7 Park Avenue Financial, we say,' that's our kind of client!
In 1871, Henry Frick borrowed through good and bad times to grow his businesses. His banker, Thomas Mellon, described him as someone who “knows his business.”
At 7 Park Avenue Financial, that’s the type of client we support—hands-on, informed, and proactive in managing their turnaround.
Establish a Payment Priority Plan
During a business refinance, prioritize essential payments:
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Government obligations
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Key suppliers
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Rent and utilities
Firms with bank loans must act quickly when a demand loan is called. Restructuring and alternative funding must follow immediately.
Asset-Based Lending to the Rescue
Asset-based lending (ABL) can replace traditional bank financing and provide interim liquidity.
ABL leverages assets such as receivables, inventory, and equipment to support ongoing operations and growth. These facilities often come from non-bank lenders and offer flexibility to refinance assets while maintaining balance sheet strength.
In some cases, real estate financing is handled separately within the restructuring process.
Summary of Turnaround Financing Solutions
Available turnaround finance options include:
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Accounts receivable financing
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Inventory loans
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Canadian bank credit facilities
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Non-bank asset-based lines of credit
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SR&ED tax credit financing
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Equipment or fixed-asset financing
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Cash flow loans
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Royalty or mezzanine finance solutions
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Purchase order financing
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Short-term working capital loans or merchant advances
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Securitization facilities
CASE STUDY — ABC COMPANY
Company:
ABC Company, a Winnipeg-based industrial parts manufacturer with 45 employees and $8 million in annual revenue.
Challenge:
The company lost its largest customer, representing 40% of revenue. Outdated equipment led to quality issues, supplier credit was strained, and the bank froze its operating line. Payroll was at risk, and closure loomed within 60 days.
Solution:
7 Park Avenue Financial arranged $1.2 million in turnaround financing—a mix of term debt and working capital. The plan included supplier negotiations, $300,000 in equipment upgrades, improved quality control, and diversification into five new market segments.
Results:
Within 12 months, ABC Company returned to positive cash flow, restored supplier confidence, and grew revenue to $7.2 million. Defects dropped 65%, production rose 30%, and no customer made up more than 20% of sales. The firm refinanced at lower rates after eight months of profitability, preserving all 45 jobs and full ownership.
Key Takeaways
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Turnaround financing combines debt restructuring and asset monetization to restore business health.
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Early action prevents costly insolvency or formal proceedings.
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Maintaining sales and shortening the cash conversion cycle are essential.
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Accounts receivable financing and sale-leaseback options provide quick liquidity.
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Asset-based lending offers flexible non-bank alternatives for refinancing.
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Expert guidance from 7 Park Avenue Financial ensures an effective recovery plan.
Conclusion
At 7 Park Avenue Financial, we help clients plan and implement restructuring strategies that work for all stakeholders.
Our services include:
We act quickly, with expertise built on years of Canadian commercial finance experience.
Conclusion
Every business situation is unique. Effective turnaround planning focuses on preserving company value, improving cash flow, and ensuring a sustainable financial structure.
Work with a trusted partner who understands business refinancing and restructuring.
7 Park Avenue Financial helps Canadian firms navigate the turnaround process and financing with confidence, offering solutions that stabilize operations and fuel recovery.
Welcome to the turnaround plan and your new financing partner.
FAQs: Turnaround Financing Explained
What is turnaround financing?
Turnaround financing combines new debt and the monetization of business assets to help companies restore profitability and achieve growth objectives.
How does turnaround financing differ from a regular business loan?
Unlike standard loans, turnaround financing focuses on cash flow restoration and asset leverage, not just borrowing capacity.
When should a company seek turnaround finance?
When facing persistent losses, loan defaults, or liquidity issues that threaten operations, it’s time to explore restructuring and refinancing options.
What are the main goals of turnaround financing?
To stabilize cash flow, restructure existing debt, and position the business for renewed profitability and growth.
STATISTICS ON TURNAROUND FINANCING
- Approximately 60% of businesses that secure turnaround financing successfully return to profitability within 18-24 months
- The average turnaround financing deal in Canada ranges from $500,000 to $5 million for small to mid-sized businesses
- Businesses receiving turnaround financing with operational consulting support show 40% higher success rates than those receiving capital alone
- Nearly 75% of businesses seeking turnaround financing waited until experiencing severe cash flow problems rather than addressing early warning signs
- The cost of turnaround financing typically runs 8-15 percentage points higher than conventional business loans, reflecting the increased risk profile
- Canadian businesses using turnaround financing preserve an estimated 70% of jobs compared to bankruptcy scenarios
CITATIONS
- Gilson, Stuart C., and Michael R. Vetsuypens. "CEO Compensation in Financially Distressed Firms: An Empirical Analysis." Journal of Finance 48, no. 2 (1993): 425-458. https://www.jstor.org
- Hotchkiss, Edith S. "Postbankruptcy Performance and Management Turnover." Journal of Finance 50, no. 1 (1995): 3-21. https://www.aeaweb.org
- Altman, Edward I., and Edith Hotchkiss. Corporate Financial Distress and Bankruptcy: Predict and Avoid Bankruptcy, Analyze and Invest in Distressed Debt. 3rd ed. Hoboken: John Wiley & Sons, 2006. https://www.wiley.com
- Chatterjee, Sris, Upinder S. Dhillon, and Gabriel G. Ramírez. "Resolution of Financial Distress: Debt Restructurings via Chapter 11, Prepackaged Bankruptcies, and Workouts." Financial Management 25, no. 1 (1996): 5-18. https://www.jstor.org
- Industry Canada. "Key Small Business Statistics." Innovation, Science and Economic Development Canada, 2024. https://www.ic.gc.ca
- Business Development Bank of Canada. "Financing Solutions for Canadian Businesses in Transition." BDC Publications, 2024. https://www.bdc.ca
- 7 Park Avenue Financial ."
