BANKS AND FINANCIAL CRISIS. IMPACT ON THE BANK FINANCING. ASSOCIATED ARRIAGA SME FINANCE EXPERT
THE FINANCIAL CRISIS AND THE BANK FINANCING OF SMES.
Companies are seriously affected by the financial crisis, especially the problems of bank financing. Banks do not want to fund companies and many fall into bankruptcy because the banks and financial institutions.
But you should not give up bank financing. Although it seems impossible can obtain financing from banks.
The easiest way to get bank financing is ask for it to banks that have financed the company. The banks, in the end, not interested to sink companies owe them money. Soon they will serve mortgages and guarantees as a result, in short, is a bad solution and very slow.
So when a company is in financial difficulty have recourse without delay to its own banks. You must do this in a determined way. There are no guarantees and offering to run new mortgages on property of the employer. What there is to offer to run reports and analysis to support that the company is viable and has ability to repay debts.
Banks behave as if they were in a hurry. Therefore it is important to press. If necessary you have to stop paying their loans. Not a bad idea to warn them that you enter soon in bankruptcy.
Sometimes you have to take a step a step further. Must notify the Commercial Court of the start of negotiations with creditors for support of a proposal for agreement of creditors. With the court decision of the court begins to have a time limit for filing a bankruptcy if they do not get funding. Our experience has been that, from now, banks have seen it then it will seriously and put the batteries. But these legal proceedings are not binding per se to seek bankruptcy protection.
There will always be to negotiate the issue of guarantees but give the minimum. In practice there is little point giving up too much.
Arriaga Associates have had their clients get the bank financing they need. Arriaga partners can commit to outcomes and collect their fees based on the objectives achieved.
Jes√ļs Mar√≠a Ruiz de Arriaga
Lawyer, economist and financial consultant. Managing Partner