Post business rescue financing

Nov 20, 2015

Businesses in trouble wait too long before going into business rescue. This creates more problems than it should.

  • The longer a business waits to avoid the “disgrace”, the less likely it is to rescued
  • A director who avoids the business rescue provisions, and then has his business liquidated, can be held personally liable for the claims of creditors.

Of course as they wait and wait and wait…. for that miracle… time based bills fall due and then over due. And then when it is too late, they do the business rescue thing.

Part of the problem is that banks have been spectacularly reluctant to think like they have moved into the 21st century with the rest of us (apart from providing some “mobile app”) and they steadfastly refuse to get involved in post rescue financing. I even had one bank renege on its agreement to keep existing financing in place because it later discovered that the main shareholder had stood surety in the deep dark past, and if the liquidator acted quickly… You can imagine.

Well now there are forward thinking people who are able to help with risk capital, in conjunction with the business rescue practitioner, particularly if a business is able to be rescued, jobs will be saved, and there is equity available for acquisition.

This is not primarily loan capital. It is particularly for the acquisition of part of the equity, plus some specialist knowledge in a variety of disciplines, plus some lending if necessary.

It is also necessary that the business is not only rescue-able, but is also able and willing to grow, so that the white knight gets a good return on his investment. Let me know if this is something you need to talk about. 011 875 2330.


Tags

business rescue, finance, financing, investment


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