When a business is overly leveraged and growth momentum is interrupted, its ongoing livelihood can hinge on the management of the lending relationship.
The truth is; loan officers do not want their loans downgraded or sent to workout. They want their portfolio companies to succeed. But they have little power to make this happen themselves.
First and foremost a business must take full responsibility to keep their loans in covenant compliance, and if it cannot, it must do everything within its capability to bring their loan back into conformance as quickly as possible. It is serious business and procrastination is never helpful.
During a period when cash is tight, suppliers are pressing, covenants are missed and your available credit line becomes exhausted or worse frozen, the importance of a seasoned executive that knows first-hand how to manage this type of crisis is invaluable.
Being able to clearly communicate and understand the needs of commercial lenders is essential in developing, and most importantly maintaining, a solid banking relationship.
Well constructed financials are the first step. A clear operating plan with milestones and specific deliverables is the second. Regular and accurate communication is third.
We are experienced in managing banking relationships and can assist
your company to improve its skill in this area.