Your Loan has Been Assigned to Special Assets...What Now?
• Engage a qualified turnaround professional.
Special Assets may suggest or require that the company engage a turnaround professional, also known as a restructuring expert and/or financial advisor (FA). If the company does not react quickly to the bank’s suggestion and engage an advisor, the bank may engage a turnaround firm that reports to the Special Assets officers, not to you. In most cases, it’s best that the company engage the turnaround professional so he/she can advise you directly about the issues and processes you are likely to confront.
In any event, the lender will probably insist on unfettered access to the FA. This may work to your advantage, since the FA and Special Assets speak the same language, and consequently your FA will more quickly and accurately understand what the bank is looking for, and be able to translate this into actionable steps for your company.
You can find a turnaround professional through your bankruptcy counsel, the local chapter of the Turnaround Management Association (TMA) or ask the Special Assets department to recommend three or four qualified professionals it knows and trusts. The bank will probably give your company a bit more breathing room once it knows that qualified professionals are in place, especially if it is familiar with and trusts those professionals.
• Begin the search for replacement financing.
Turnaround experts will know about many alternative sources of funding that are more flexible than traditional banks, and that may be willing to refinance your company. Often times, the work required to prepare the information requested by Special Assets can also be used as the basis for presentations to these alternative sources of funding.
So, to keep expenses in check, and increase the likelihood that the company will have an alternative source of funding available, instruct your turnaround professional to begin canvassing the market immediately for replacement funding. A qualified turnaround professional will know which sources to approach and how to best tell your company’s story to those alternative funding sources.
Mark Hahn is a managing director and founder of Graphic Arts Advisors, a boutique strategic financial advisory and consulting firm focused exclusively on the printing, packaging, mailing, marketing services, brand management, and related graphic communications industries. With more than 35 years of graphic communications experience in the areas of finance, operations, sales, M&A, and general management, Hahn has served as chief financial officer, chief operating officer and other senior positions with several commercial printing companies, as well as founding and eventually selling his own printing company.
The firm assists company owners and management, as well as their lenders, investors and shareholders in the following areas: mergers and acquisitions, sale of business, strategic and financial advisory, capital structure and funding, financial analysis, interim and turnaround C-level management, business valuations and serving as consulting experts. Hahn is the author of The Target Report and is regularly published and quoted in printing industry trade and management journals.
Mark Hahn can be reached at (973) 588-7399 or firstname.lastname@example.org