During a crisis situation there are many problems which a company may experience which are critical to the short term and long term viability of the business. Two primary relationships require significant attention and concern: the relationship with vendors and the relationship with lender(s) and/or investors.

It is difficult to "move" a company forward if their primary vendors have ceased shipping products/services due to delinquent payments from the company. In some instances, the company has made numerous promises to make scheduled payments, and has failed to comply with these agreements. This might result in reduced credit terms (a reduced credit ceiling or shorter net due date for purchases), a higher price structure, COD payments, payment in advance, payment by certified check, or ultimately a complete cessation of purchasing options often times resulting in litigation. Any one of these resulting actions could prove to be fatal to the company.

Concurrent with these types of problems is the relationship with the primary lender, the bank. At this point in time, the company is most likely not operating in a profitable manner, and the bank may have listed the loan as "non-preforming" even though loan payments may be current. Or, in a worse case scenario, the company is delinquent on their loan payments which creates even greater problems.

There are creative solutions which we offer during these problematic times.

We offer an "outside, objective" point of view to the company as well as to their vendors and lenders. We will review various activities and operations of the company, and will develop an initial plan to deal with current financial needs (including a plan to deal with delinquent payables). Frequent, and sometimes daily communication is maintained with vendors and/or the bank to provide them with adequate information.

The company is advised on how to restructure their purchasing policies, their pricing policies, the collection terms for products/services sold to their customers, in an effort to definitively identify a reasonable cash flow necessary to satisfy vendors and the bank. Sometimes, this can require drastic restrictions, or even a "pre-approval" process for purchasing and/or payment. This process usually restructures internal procedures in such a fashion that purchasing power is maintained, thereby allowing the company to continue operation. In some instances, due to restructured policies and procedures, credit lines and terms are increased by the vendors!

The level of trust between a vendor and the company can be re-established if future activities are conducted with complete honesty and communication. This requires that constant open lines of communication need to be maintained, and that every agreement made is complied with. We deal directly with the vendors, establish purchasing and payment controls, and create strategies to ensure that every opportunity to continue operations is maintained while also reducing delinquent payable accounts.

If you would like to discuss how our services can assist you with your vendor and creditor relationships, please contact us to schedule an initial consultation.

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