For business leaders, the corporate restructuring process may seem overwhelming. While there is much to consider, banks and nontraditional lenders can take several steps to help their borrowers optimize the value of their collateral and generate liquidity that supports financial — and operational — transformation while maintaining a sufficient loan to value ratio.
Companies often have several types of tangible and intangible assets, ranging from manufacturing equipment to rolling stock and accounts receivable, that can be collateralized to secure funding necessary to not only weather a restructuring, but also invest in promising new product lines and capital expenditures needed to help the business grow. Executives, however, need to be careful to develop a thoughtful strategy with their lender to optimize the liquidity they can receive from collateralizing their assets and be apprised of how to mitigate risk and avoid financial and legal issues throughout the process.
