At times of turbulence, plans and forecasts made in quieter periods can be less relevant and previous approaches to doing business become no longer effective. Everything changes: the structure of supply and demand, payment terms with suppliers and customers, interest rates on bank loans, and access to debt financing. Changing how one operates in line with these new realities becomes key to survival for both companies and banks.
Restructuring your business’ loan portfolio is therefore a priority, enabling borrowers to stabilise their position and gain time for operational changes and business performance improvements to meet these new realities head on.
During periods of widespread financial difficulty, lenders are just as interested in restructuring loan portfolios as borrowers: the level of recoverability of restructured loans exceeds the amount that banks can receive from litigation by many times over, and if preferable to attempting to recover debts through of collateral and borrower bankruptcy procedures.
At the same time, banks and companies can find it hard to understand each other and reach agreement on mutually acceptable terms. This is especially true if the loan portfolio includes multiple lenders from different backgrounds: state and private sources of funding, or foreign and domestic banks, for example.
