CORPORATE FINANCING, REFINANCING AND BANK NEGOTIATION. MANAGING IN A TIME OF CRISIS SME LIQUIDITY DIFFICULTIES. HOW TO BE EXPERTS IN CORPORATE FINANCE. NOW ALSO IN ZARAGOZA, SPAIN. Reviewed by Momizat on .   CORPORATE FINANCE, BANKING AND TRADING REFINANCING Today almost all companies are experiencing financial problems by restricting bank credit. In many companie   CORPORATE FINANCE, BANKING AND TRADING REFINANCING Today almost all companies are experiencing financial problems by restricting bank credit. In many companie Rating: 0
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CORPORATE FINANCING, REFINANCING AND BANK NEGOTIATION. MANAGING IN A TIME OF CRISIS SME LIQUIDITY DIFFICULTIES. HOW TO BE EXPERTS IN CORPORATE FINANCE. NOW ALSO IN ZARAGOZA, SPAIN.

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CORPORATE FINANCE, BANKING AND TRADING REFINANCING

Today almost all companies are experiencing financial problems by restricting bank credit. In many companies the balance sheets are deteriorating by the business crisis and the collection problems with customers. And some, more than we wanted to limit situations are living close to insolvency.

This post wants to make an approach on how to manage the liquidity problems that are suffering the companies, especially SMEs. Why not talk about the financial resources to non-eligible small businesses.

A relatively healthy, if do not get funding from traditional media accounts of bank loans, trade discounts and bank loans, can exploit alternatives such as receivables and payment of invoices.

If this is not possible the company may endorse notes and drafts to pay suppliers, including the transfer of credits. Although not a perfect solution for many providers feel more comfortable because it is providing support to our company and support of our client.

If this is not enough, even before the previous solution, it could seek to reduce assets. For example, you can reduce inventory, shorten collection periods with customers, reduce the number of references, pay later suppliers, etc. Of course these measures hurt the company commercially, but worse may be the company into a liquidity crisis or solvency.

It is always the possibility of refinancing. The bank refinancing is not as difficult as many people think. Refinancing is possible because there is a previous funding, usually banks. Consequently one can not let the bank take away the money he has borrowed. For example, if the bank does not want to renew a loan the bank must be told no. If you want, it becomes a loan ICO to 5 years. The bank will prefer this solution to having to declare as failed credit and get into a lawsuit. Our experience as financial advisors is that banks will try at all costs not to renew the credit account or loan. But if the company is firm, with a poker face, in the end the banks reluctant to refinance the company. And it’s often the banks already have a lot of money invested in the company. So when a company is more borrowing will be more opportunities for refinancing. A debt-free company can not refinance.

They are also the circumstances of insolvency or illiquidity intense. Currently, the best form of negotiation is to talk to banks about the possibility of raising a bankruptcy. You can even submit the communication notifying the Commercial Court has started negotiations for the development of a proposed agreement. Banks know that you are talking seriously and react.

And finally I must say that pose a bankruptcy on time is the best way to get financing because the debts are not enforceable, foreclosures are stopped and executions and the employer only has to charge customers but has no to pay the debts before the bankruptcy declaration. Certainly this can damage the image of the company’s insolvency but forever damaged. Manage very well be crucial communication.

In Arriaga Associates have successfully managed financial situations and are experts in refinancing and bank negotiation.

Jesús María Ruiz de Arriaga

Lawyer economist. Managing partner.

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