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Turnaround finance: What is it?

If you have a struggling but viable business that could use some help, turnaround finance might be the answer. Turnaround finance is just that: money that allows a business beset by short term cash flow issues or credit restrictions to turn things around and get back on the path to sustainable growth. Often disruptions to cash flow simply cannot be predicted. Likewise, restrictions on credit can have the effect of derailing long term plans that would likely have paid handsome dividends.

While some view turnaround finance as a risky venture the fact is, if administered properly, it can provide the spark your company needs to stave off insolvency and relight the fire of growth.

If your business is still viable and its cash flow and/or credit problems are likely to be temporary, turnaround finance can be the ideal way to free up capital, pay debts and return to a growth posture in relatively short order.

When is the right time for turnaround finance?

Not every company that is experiencing cash flow disruptions or credit problems is a good candidate for turnaround finance. In order to qualify you’ll need a viable business model along with a history of stable, profitable performance.

When assessing potential candidates for turnaround finance, lenders look more to the past than the present. They understand that the unexpected happens and can send an otherwise viable business careening off the rails. What they’re looking for then is proof that, if given the chance, you’ll be able to right the ship.

You should only consider this type of finance if your company has a proven record of profitability and you are certain you can fulfil the terms of the arrangement.

Keep in mind also that if turnaround finance is not for you there are other options available that can help your company transcend its difficulties.

 

Additional considerations

Turnaround finance will likely be your best option if the following conditions are in play:

  • Your company is viable and profitable but has hit a short term disruption in cash flow. That disruption may stem from difficulties experienced by a major client, the loss of a major client, equipment failure or an unexpected, likely temporary, drop in sales.
  • You have a viable plan for turning things around with the money you will raise.
  • There is reason to be confident you can pay back lenders within the agreed upon time frame.
  • You have few resources at hand in spite of the fact that you are profitable and have a robust cash flow.

How does turnaround finance help?

If your company is feeling extraordinary pressure from creditors and is unable to make payments on time it may be heading for insolvency or even forced liquidation. However, if you have a proven business model with a record of profitability and a reasonable level of confidence you can get back on track, then turnaround finance may be your best option. With turnaround finance you’re able to pay back your creditors and remove the threat of litigation or liquidation that had been hanging over your company.

Once clear of the existential threat posed by aggressive creditors, you will be able to steer the company back toward a stable, high growth posture. Turnaround finance is not for everyone. You must be certain that your issues are short term in nature and that you will have no difficulty fulfilling all the terms of the turnaround finance agreement. Turnaround finance is a one-time injection of capital in order to clear away debt and enable your company’s latent potential.

Call HJS Recovery to learn more

At HJS Recovery we’ve helped hundreds of businesses just like yours find their footing again by way of turnaround financing. You’ve worked too hard to watch your otherwise viable business be swallowed up by short term problems. Let us show you how to save it.

Contact us for FREE to learn more about turnaround finance.

Our team is second to none when it comes to helping UK businesses weather the storm of business setbacks. Don’t wait until it’s too late to get help.

Call us for free on 0800 0141 130 and together we will sort things out.


Contact us today for FREE to learn more about how we can help you and your business.

We have a team of advisers who have helped hundreds of businesses around the UK that have faced financial pressures on every scale. You are not alone.

Call us free and in confidence on 0800 0141 130 and together we will sort things out.