Financial Debt Restructuring & Credit Limit Establishment
Financial Debt Restructuring
Companies put forward their debt strategies while planning within their projections. They have to include risk factors in their projections while seeking resources for investment purposes or working capital needs. However, in cases where risk factors emerge negatively in the repayment process, companies may have difficulty in fulfilling their commitments.
The emergence of macroeconomic systemic risks on a global or national scale creates an environment that is difficult to prevent and its effects are fully felt. At this point, it is possible to expect financial institutions to show some flexibility up to a certain point. However, it is expected that friction and miscommunication will arise between companies and the financial institutions that have provided resources at the point of realization of risks.
In the process of fundraising, failure to provide appropriate collateral, failure to structure the payment term properly, and failure to explain the project and its purpose well enough cause problems for both sides in the repayment process. At this point, it is crucial for the survival of the company that the problems are evaluated at the source and, if possible, resolved or the loan conditions are restructured according to the solvency of the project or the company. In this process, the assistance of an independent counselor who can speak the same language as the counterparts can fulfill an important role in overcoming unnecessary friction and miscommunication. The only way for the actors to establish good faith and trust-based approaches is the presence of an intervening party, the consultancy.
Erke Consulting helps economic actors to focus on their core activities by helping to normalize the situation for both the funder and the payer by overcoming problems within the framework of a win-win philosophy, taking into account the mutual interests of the sides.
Credit Limit Establishment
Especially SMEs with high development potential are too conservative when it comes to borrowing and are unable to take advantage of opportunities that come their way due to lack of resources. It is very important for companies to properly present themselves and their projects to the financial institutions that will provide resources.
Unfortunately, in companies that are not fully institutionalized, this task falls to the shareholders or senior managers. This can distract attention from core activities. The role of an independent partner in the process of accurately defining and communicating the vision and strategies to all stakeholders is important for the effectiveness and speedy finalization of the process.