Real time accounting offers many benefits for business owners! It is something we implemented at…
Debt Restructuring becomes necessary because business is dynamic. As a business grows, its financing structure often doesn’t reflect changes within the business.
Too often finance is provided to meet a need at a particular point in time without taking into context the overall group position.
The method of funding is usually driven by:
The end result often being a complex and cumbersome debt structure that ultimately impedes business operations, cashflow and/or wealth creation.
Debt Restructuring - Common Causes
Historic Business Structures
Changed Banking Policy - Why the Right Structure is Critical!
Another reason to ensure debt is correctly structured is that a number of Banks now separate their business and personal lending functions in relation to business clients.
Regardless of debt size, borrowing history, the Business Bankers and Business Banking Centres in the affected Banks, can no longer approve personal lending (Home Loans, Investment Loans etc) as they have in the past.
The challenge for business owners here is that when this occurs, whilst a Business Banker can view the borrowing in the context of the overall Group position, the Personal Bankers assess it in isolation using very stringent and rigid criteria. The end result being it is now taking much longer to process loan applications.
To minimise disruption and avoid frustration this is yet another reason to ensure your debt structure is correct.
Best Practice - Align Structure to Purpose
Debt Restructuring - The Keys to Success!
If you feel your current debt structure is restrictive and is impeding your business operations, or wealth creation opportunities, and would like to learn more about how we can assist don’t hesitate to get in touch.