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
Turnaround financing and business refinance solutions are often required when your company has been on the rise... and then, unfortunately, a fall situation via some liquidity crunch.
Turnaround finance typically requires restructuring loan, or loans, of some type, combined with performance changes in your business. It's all about fixing a business! Let's dig in.
DON'T GET CAUGHT OFF GUARD IN A LIQUIDITY CRISIS
Well-managed companies with a proper business plan and cash flow forecasts are rarely caught totally off guard in a liquidity crisis ( pandemics excluded ! ) and often can reverse very negative financial results. If your management team is not seasoned, your company has to get help to survive a potential insolvency crisis. The ability to complete your business turnaround via restructuring and turnaround financing will put your firm back on solid ground.
TIMING IS CRITICAL IN THE TURNAROUND EFFORT - KNOW YOUR TIMELINES!
Financial recovery is ' time-sensitive, 'to say the least, so our ability to select and work with the right firm is ' job 1 '! Every industry has unique financing needs, and you need a firm with a track record of business financial success to deliver on restructuring loans that will work to your benefit. Leading experts such as KPMG, world-renowned for a turnaround, advise that turnaround and restructuring is really a 3 step or 3 phased approach for the restructuring of a company - addressing the strategic crisis, addressing the sales and profit crisis, and then the fix on your liquidity crunch for funding a business.
MAINTAINING SALES AND CONTINUITY IS KEY
Challenges in the turnaround abound, especially since in turn around .especially when it comes to SME COMMERCIAL FINANCE needs, new equity/owner capital is often difficult if not impossible to acquire. So that lack of money must come from operating assets and sales. The ability to maintain sales and increase profits is, of course, also key to your cash flow problems. Safe to say that owners/managers have to recognize the issues that arose before a turnaround need - they include costs in the business, mgmt/employee performance, or lower sales.
WATCH FOR THE KEY WARNING SIGNS OF BUSINESS DISTRESS
Naturally, those types of issues, combined with a poor asset and sales finance strategy, are typically the key issues. Key signs of a poor finance strategy being in place are your inability to buy new needed assets, inability to meet fixed cost commitments, and loan and lease default scenarios that will require restructuring of some sort. Typically owners and management will notice trends in costs and sales revenue that require corrective action. In many cases, timely attention to those areas will save any formal insolvency steps being taken.
LENDERS / MANAGEMENT / ADVISOR/OWNERS - WORKING TOGETHER
This is when a hard look at your business needs to take, and quickly. That's a look at the company's overall structure, and that typically involves your vendors, all owners, and any other stakeholders such as key employees and, of course, your current lenders. You are looking for ' the fix ' and may need outside help. A good management team can often take informal internal steps to save a good business, but as we have stated, outside help should probably be considered. The ability to have time to restructure your firm on your own is always less costly. It allows you to have maximum flexibility in negotiation with third parties such as banks, etc.
IMPLEMENTING A RESTRUCTURING PLAN AND REFINANCING
During this time, owners and financial managers must address all the operating issues within the business, such as accounting, administration, and the management of working capital. Never has the role of financial and administrative staff been crucial as the ability to provide financial results and cash flow forecasts for owners and lenders. There has never been a more critical time to accelerate the collection of receivables and taking a hard look at inventory turns and the overall value of inventory, which in many cases can be in various stages of production.
UNDERSTAND YOUR CASH CONVERSION CYCLE - IMMEDIATELY!
This entire process is well run, or financially distressed companies are called the ' cash conversion cycle ' and measure the travel of money as it flows through your firm. Solving cash flow problems and timing of asset conversion to cash is key. If a company manages the turnaround internally on its own outside lending has to be evaluated, either through existing lenders or new sources of business capital. Cash management becomes priority #1!
ACCELERATE ACCOUNTS RECEIVABLE COLLECTIONS
One of the quickest methods to accelerate cash is considering an accounts receivable financing facility, sometimes known as factoring, although the word ' Factoring ' has many versions. At 7 Park Avenue Financial, we recommend CONFIDENTIAL RECEIVABLE FINANCING, which allows your firm to bill and collect your own receivables while generating immediate cash flow on all sales.
MAKING A MAXIMUM EFFORT TO AVOID FORMAL PROCEEDINGS OF BUSINESS FAILURE!
An internal focus on fixing the problem allows your company to avoid formal restructuring, especially when a bank has put your account into the ' special loans ' category, often requiring a forbearance agreement to give you the much-needed time we have been talking about. Those formal proceedings such as CCAA, Debtor In Possession, Receivership, Proposal To Creditors, etc., all involve very costly and time-consuming measures. We will say that negotiating financing during formal types of insolvency is complicated!
2 QUICK WAYS TO ACCESS POSSIBLE CASH INFUSIONS
In some cases, companies that have invested r&d capital should consider factoring in their SR&ED claim. Another solid strategy we've implemented is the sale-leaseback finance process, allowing you to generate cash flow from owned assets while at the same time retaining the use of those assets. Cash conservation should be a key management focus, evaluating all possible options and ensuring debt service potential.
Many businesses get to the ' crisis ' situation without ever having prepared a proper business plan and cash flow plan. Suffice to say that now is the time to do that! That financial forecast and plan will determine where turnaround finance is needed and how it could be achieved. Those types of efforts will determine where cash will come from and how and when it will be used.
THE STORY OF HENRY FRICK
There is a great story 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!
There often emerges a clear ' pecking order ' in who or what needs to be paid and addressed in a business refinancing. That list of key players is pretty short - government obligations, key suppliers, and utilities/rent! For those customers with bank facilities in place, they are, of course, forced to address the turnaround when a demand loan is called, which must be addressed by the business owner.
ASSET BASED LENDING TO THE RESCUE
An asset loan is often the solution that ' takes out ' the bank and provides an interim financing solution. At the end of the day, it's all about leveraging assets via asset-based lending-type solutions that will allow you to put an operating plan in place while still retaining some balance sheet strength. Asset-based lending facilities typically come from non-bank lenders, allow your refinance assets and move to recovery with a loan amount that makes sense.
ABL financing works in all scenarios, whether a firm is restructuring or not, and provides your firm with maximum liquidity for all assets and the ability to monetize sales. In some cases, a real estate play may be part of a restructure and is often handled separately in the due diligence turnaround process.
SUMMARY OF TURNAROUND FINANCING SOLUTIONS :
Turnaround finance Solutions that are available are diverse - They 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
Cash flow loans
Royalty finance solutions
Purchase Order Financing
Short Term Working Capital Loans/ Merchant Advance
Securitization
RESTRUCTURING ADVISORY ASSISTANCE
At 7 Park Avenue Financial, we focus on the turnaround task at hand, helping you plan and facilitate a restructuring that works for all vested parties through the turnaround process. That might include cash flow planning and financing, negotiating with current senior lenders and other secured lenders, as well as vendors/suppliers. Raising business capital and business loan funding through this process requires experience and the ability to move quickly when your firm needs it most.
CONCLUSION
Many firms and industries have different needs and circumstances. At the end of the day, it's all about preserving the true value in your company and its future, ensuring the company transformation process works through a financial distress period. That comes from your work on implementing costs and sales analysis and ensuring you have a financing partner in place to optimize cash flow and working capital. Your ability to take action in turnaround planning to address lower sales or cash flow generation is key to the turnaround.
If your business is facing operating losses and other issues requiring business refinancing and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor and restructuring consultant for help in asset loan and cash flow needs. Welcome to the turnaround plan!
FAQ: Frequently Asked Questions
What Is Turnaround Financing
Turnaround financing solutions are business loans that are a combination of debt and monetizing corporate assets to allow a firm to regain profitability and growth objectives.
Click here for the business finance track record of 7 Park Avenue Financial
