Businesses that find themselves needing to seek support with mounting repayment challenges should be aware that lenders and other key stakeholders are facing pressures of their own. So what actions and strategies will help you bring them onside?
Pressure on liquidity is intensifying as deferred loan, tax, rent and pension payments become due and wage bills are no longer covered by furlough.
More than half of the companies taking part in our Preparing for the recovery: Overcome the challenges ahead survey anticipate a liquidity shortfall in the next 12 months. A similar proportion report increased challenges around repaying/refinancing loans, while 64% of respondents anticipate problems ahead.
In earlier deep dives in this series, we’ve highlighted the importance of understanding your cash position, while putting in place the realistic forecasting needed to map the road ahead. As we explore here, you also need to win over your banks, landlords, pension trustees and other key stakeholders.
The immediate demands don’t just include credit lines to bolster working capital, but also the investment needed for growth and other initiatives such as through digital transformation or targeting a move to net zero. Raising new money in the context of a business recovering from the pandemic will undoubtedly attract greater scrutiny from lenders.
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