Why turnarounds demand a top-gun delivery
“I feel the need…the need for speed!”
The above quote is not just con ned to Top Gun pilots, ‘Maverick’ and ‘Goose’; it is equally true of the performance of Asset Based Lenders in turnaround situations.
According to the Turnaround Management Association (UK), ‘Turnaround’ is the process of avoiding failure or stabilising a struggling business and making changes that lead to sustained improvements and regrowth.”
Our experience at Praetura Commercial Finance tells us that asset based lending has a transformation role in helping businesses to stabilise and subsequently grow their businesses. That requires an expe- rienced lender, transactional con dence and a greater availability of capital to the distressed company than the company would normally receive based on their historical trading records.
We respect that the turnaround community has to work at pace because there is generally only a nar- row window in which success can be achieved. Consequently, more often than not, these transactions are time critical and the ability to expedite the deal with certainty is vital.
Here are the key requirements for an Asset Based Lender in a turnaround situation:
Know your mission – Map out the key events and milestones through the entire transactional journey with clear and detailed schedules.
Early intervention – Clients that involve their lenders at the earliest stage increase the opportunity of effecting a successful turnaround, enabling the business to arrest decline through a timely injection of working capital.
Velocity – Lenders must look to optimise the quantum of funding by unlocking the value of all business assets, allowing the management team to stabilise the business quickly.
Agility – By harnessing the extensive experience gained in a variety of turnaround and restructuring scenarios, it is often possible to anticipate events before they happen and take pre-emptive action.
Effective communication – Communicate clearly, directly and appropriately, providing reassurance to all stakeholders concerning the deliverability of the transaction.
Responsiveness – Turnarounds require frequent and focussed dialogue and rapid response to queries as they arise.
Short-lines of command – Access to senior decision-makers with the authority, accountability and commitment to see the deal through.
Acute awareness – In turnaround situations, it is not the pro t or the orders, but the lack of cash and misalignment of timing that will kill you.
When looking at a turnaround, demand nothing less than Top Gun delivery!