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| Turnaround Financing |
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| Control the Financing Costs of Your Turnaround
Financing your recovery can be one of the most challenging pieces of the turnaround puzzle. Find internal financing by conducting a thorough review of every line on your Profit & Loss Statement:
1) Expenses: Cut all non-essential expenses including advertising, purchase orders, supplies, cell phones, charity, autos, credit cards, expense accounts, computers & software, subcontractors, supplier discounts, insurance, leases, legal services, marketing & promotions, memberships, postage & shipping, service contracts, subleases, subscriptions, telephone, travel, and utilities.
2) Revenue Growth: Increase prices & enter new markets that have low barrriers to entry.
3) Asset Sales: Sell underutilized assets, excess equipment, surplus inventory and notes receivable.
4) Receivables Management: Improve receivables management, pre-payments & deposits, past due invoices and judgment recoveries, etc.
5) Debt and Vendor Management: Negotiate debt forgivenss or improved terms in exhange for exclusive buying agreements, negotiate debt settlement and save 25% to 75%, interest-only payments, unused lines of credit, purchase to consignment change-over, returns for credit, grace period on loans, stretch accounts payable payments, trade payables for note payable, and cancel automatic electronic transfer payments.
6) Tax Money: File your tax return and file for a "loss carry back", and stop making estimated income tax payments until you are profitable again.
Once you have exhausted your internal ability to finance your turnaround, or find that internal resources are inadequate, then you will need external financing. The best time to make these arrangements is while you are strong financially and before you need the cash. The more dire your circumstances the more difficult and costly it may be to secure financing. Be prepared to provide potential lenders or investors with the following documents for their review:
• Executive Summary / Turnaround Plan
• Financial projections
• Current financial statements
• Tax returns for past 3 years or audited financial statements
• Amount, reason and purpose for the money
• Personal balance sheet
External financing sources include:
Receivables factoring
Asset-based Lending
Leasing companies
Refinancing
Credit cards
Vendors and customers
Out-of-pocket (personal assets)
Friends and family
Parent company
Angel Investors
Peer-to-Peer lending
Call CrownWatermark Business Consultants at 253-279-4067 for your FREE consultation on cash flow and finance solutions for your business.
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