As a business owner, possibly a founder, looking after the day-to-day running of your business, it can be challenging to see the woods through the trees when it comes to long-term financial planning. The role of the finance director is crucial in managing cash flow, monitoring finances, enhancing efficiency and maximising long-term returns. 

More importantly, they are expected to foresee and pre-empt any financial challenges in the future. This is where the role of a fractional finance director can prove invaluable.

The benefits of debt restructuring An outsourced finance director will review your situation without bias or emotion, based on facts, figures, and prospects. There are many issues to consider when looking at debt restructuring, which include:-

Use of collateral When it comes down to it, every financial transaction is based on the potential risk against the potential rewards. Therefore, the ability to use assets as collateral will reduce the risk and also lead to more favourable interest rates. In the eyes of a lender, if your business were to default, there would be sufficient assets to cover their debt.

Enhanced cash flow As a fractional finance director looking at debt restructuring, one of the main challenges is to enhance cash flow while maintaining the integrity and potential of the business. This will often involve difficult decisions, many of which are easier to identify and act upon as an unconnected third party. While appreciative of the company's history, founders and staff, moving with the times is crucial.

Refocus the business Few businesses today reflect the structure, services, products and even character with which they were initially founded. It is easy for companies to lose focus, taking an ad hoc approach to expansion while becoming disjointed and inefficient. The process of restructuring debt should also involve refocusing the business, with no operations, personnel or services protected.

Attract outside investment While there are many entrepreneurs and business founders, the most successful appreciate outside assistance/investment and know when to release at least an element of control. We have worked with many clients to identify investment shortfalls, potential investors and long-term strategic partners, creating firm foundations for their businesses going forward.

The benefits of a fractional finance director Over the years, we have led numerous refinancing and debt restructuring projects, placing companies on a much firmer financial footing and able to look ahead.

We offer experience and expertise in a range of areas, such as:-

A new set of eyes Simple but effective, we will come into your business with a new set of eyes, no bias and no conflict of interest just focused on the long-term success of your company. This often allows us to identify obvious and less obvious areas of concern where debt restructuring and reorganisation can enhance profitability and the long-term strategic direction of your business.

Debt negotiations Knowing which lenders to speak to, the broad terms and conditions on offer and, more importantly, the information they require to come to a favourable decision is invaluable. A detailed, more importantly, achievable, strategic five-year plan will enhance your chances of restructuring your debts. Having worked with many lenders, we can help you negotiate the best deals for your situation.

Industry contacts We focus on innovative growth-driven companies with turnover between £5 million and £15 million, nurturing numerous industry contacts over the years. On occasion, these have created potential for investment opportunities where there are synergies and specific areas of expertise. Debt restructuring can be a game changer, but it can be even more with an active investment partner.

Enhancing internal systems While one-off events can prompt debt restructuring, our experience shows that signs can emerge months or even years in advance. A critical element of our legacy is the enhancement of internal financial controls. Incorporating focused systems which use the latest technology to monitor and identify potential issues with your finances, profitability and cash flow. A glimpse into your potential future.

Summary

Interest rates have risen dramatically over the last two years, which, together with increased general running costs, have squeezed company cash flows. While facing the daily challenges of running your business, it can be difficult to look longer-term, instead battling to retain a flow of funds to cover debt repayments. Debt restructuring offers the opportunity to refinance your debts and refocus your business, often enhancing cash flow and placing your company on a much sounder financial footing.

If you would like to discuss the benefits of a fractional finance director in debt restructuring, get in touch and we can discuss your situation in more detail.