Finance and funding for future success
The right finance at the right time
When times are hard, cash is king. Commentators suggest that the companies who emerged from the last recession as sector leaders typically had an average net debt-to-equity ratio of about half that of their less successful competitors before the downturn hit. The winners also held more cash on their balance sheet than the companies that were hit hardest.
Refinancing in a credit crunch environment
Refinancing can act as a catalyst for change within an organisation and provide the flexibility to help achieve strategic goals. Not having the right financing arrangements in place for your business may make your borrowings unnecessarily expensive or restrict access to working capital or funds for growth.
Refinancing can help alleviate some of these issues. However, in the current climate, you could be forgiven for thinking that your chances of refinancing your debt are slim. Debt funding is still available to businesses with a well thought out plan and a robust cash position.
The key to getting the right debt financing for your business is to understand what different types of lenders are offering and then find the type that suits your business.
Keeping control of your cash
When the availability of credit is impaired, lenders will look more closely at a company’s risk profile before making the decision to lend or to renew a finance facility. You may be finding that cash is becoming increasingly difficult to manage, but even in a credit crunch environment, opportunities exist for your business to stay ahead of your competitors by doing the simple things well.
