Financial restructuring / Refinancing
Financial restructuring / Refinancing of liabilities is a way to coordinate financial obligations with the company’s real business.
What does it mean in practice? Sometimes companies, due to some uncommon situations or lack of business planning, find themselves in a situation where they have to realise financing urgently, be it an investment in fixed assets or working capital. Because of their need to realise funding fast, companies have very little time to gather and process all information in a quality way, so the bank also has little time to approve financing that would be fully coordinated with the company’s business.
That is when an entrepreneur agrees to all bank‘s conditions, such as a shorter loan repayment term (in comparison with an optimal one), repayment during the whole year, even though they do business only during summer months, higher insurance fees for real estate and warranties, and finally, higher interest rates on financing, which can be reflected negatively in the future business, and even undermine current good business.
In the process of financial restructuring / refinancing of liabilities, we do a detailed analysis of a business, business cycles and cash flow, and make restructuring deals with the existing bank or find a new bank that will restructure / refinance the liabilities; all in such a way that the loan repayment is coordinated with business cash flows, to get the optimal financing conditions.