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Important Steps To Take When The Bank Has Called Your Commercial Loan
When a business demand loan has be called by the bank there has never been more of a time when a ' perfect ' solution is needed , in a timely manner. The bank demand loan letter can be the start to a difficult time for any firm.
What then are the steps required to ensure survival in the callable loan scenario? We've got some solutions, and refinancing commercial loans might not be as difficult as you think .
Not all business owners or their financial mgrs will always understand whey a band has called their loan - why would they forsake interest income and put your company in a very difficult position. In many cases your firm might have even not missed a payment !
However, when you are in the ' special loans' category at the bank there is only one immediate goal - Where can the funds come from to settle the banks outstanding loan/ loans? Ensuring business survival becomes job 1!
That challenge unfortunately comes with short time frames and the pressures on the business can be intense as the company future is in doubt.
On it's part the bank has rules around the timelines on called loans and their ability to ensure their own capital and liquidity - So they are always looking at their commercial loans to determine in their minds what might be signs of financial distress. In other words they are monitoring what might be potential ' bad debts'. By ' calling loans ' banks are in effect increasing their liquidity.
Initial steps in refinancing your business will revolve around ensuring banks are behaving properly, perhaps negotiating new deadlines , or negotiating settlement proposals. These actions are often best served when you are working with a trusted, credible and experienced Canadian business financing advisor with a financing track record of success.
In many cases ratios and covenants can be renegotiated, and some firms may on their own be able to bring in new capital. Don't forget that callable loans are a costly process for the bank also, so a mutual solution is often very desirable. Business owners are well cautioned to ensure they understand the ' call provision' in their loan documents . Bank doc's can always be a bit overwhelming.
Developing a professional reputation with the workout mgr at your bank in this time period is critical. They are experienced in dealing with difficult credit situations , from simple to complex.
So what about the 'real world ' solutions to refinancing your business in a special loan scenario .
Basic Solutions To Refinancing Your Company
Asset based lending solutions are often the best way to solve the challenge of new financing options .
SOLUTIONS INCLUDE :
Asset based non bank business credit lines
A/R Financing
Sale Leasebacks
Cash flow loans
Asset sales
Inventory Financing
Seek out and speak to business finance experts with specialized knowledge in business downsizing / refinancing and recapitalization.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Click Here For 7 PARK AVENUE FINANCIAL website !
7 Park Avenue Financial provides value added financing consultation for small and medium sized businesses in the area of cash flow , working capital , and debt financing .
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
