Banking on the right solution
The shrinking value of security, whether it be property, stock or book debts, mixed with poor financial performance really is a toxic mix. This is now making many banks take an even closer look at some of their overdraft exposures, but how to reduce an overdraft? Less available cash for the customer means that someone else doesn’t get paid. Taxman? Key Supplier? By trying to stay within the bank guidelines, a business may end up causing a terminal problem elsewhere.
Better still is to introduce external funding. An independent funder, who won’t have an envious eye on the current account who may lend against assets that the bank don’t attribute any real value to, such as Plant & Machinery? A ledger with a debt concentration issue? Contractual debt? Because the banks’ own subsidiaries don’t see the security provided as viable, doesn’t mean to say that an independent lender won’t take a different view. Is it more expensive? Yes, probably, but we are talking about the release of cash that could mean life or death to a cash starved business.
As with most things, it needs a couple of paces back to see what can be done. As much as the bank wants to arrive at a solution, so does the hard-pressed customer, who now spends time trying to manage his bank when he should be managing his business. A good number of businesses we assist report the feeling of having had a weight lifted off their shoulders once a refinancing has been completed.
Currently we are receiving more cases from our banking partners than any other sector, a real sign of the times, we are here to help…..everyone.