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Transitional Challenges

Most business challenges these days typically involve one or more of the following:

  1. Too much debt, and not enough equity (at least according to commercial financial institutions who, through many times no fault of their own, have had the rules changed on them recently by regulatory agencies).
  2. Falling  revenues, margins, sales, or some combination of these, with an inability to correspondingly adjust expenses, debt service, or built up accounts payable.
  3. Order reluctance on behalf of customers.
  4. Loss of talent, or need for skills  in new areas not previously considered important.
  5. Tougher collections of accounts receivables, sometimes combined with shrinking working capital and/or receivable financing base.
  6. Lack of new capital for expansion.
  7. Falling commercial real estate valuations and reduced loan to value lending policies on real estate projects, or on real estate that is a significant part of your asset base.
  8. Regulatory issues, unique legal issues that cross over into the business.
  9. Other.


We have not seen two workouts or business problems that are exactly alike, so most issues may fall into the ‘Other’ category.  Thirty different reasons, and all likely need a different solution. While there is no magic wand, sometimes a fresh look from someone that makes their living finding unconventional solutions to business and capital needs can be of immeasurable value. The inability to ‘see the forest for the trees’ is never as acute as it is when you are immersed in capital challenges or other business problems that are not a part of your historical experiences.

We have all likely heard the analogy of turning ‘lemons into lemonade’. That has a resounding challenge and can serve as a stimulating call to action. In fact, we have several examples in our portfolio companies where problems have indeed turned into opportunities! However, in the current economy the lemons are sometimes just that . . . . Lemons! If you are going to need more capital to continue to grow your company or if you need to find a different or additional lender, you are best served to objectively deal with that sooner rather than later. Likewise, if you need to be thinking defensively, there is no time like the present to start; waiting too long and not looking at your realities objectively can be deadly.

Sourcing creative solutions to business problems is our forte. Call us to spend a few minutes discussing the uniqueness of your situation in confidence. We may have some solutions or at least be a link in the chain that can move you further down the field. If we can’t be of assistance, we may have an idea where to send you for help.

To put it in real world terms, we ‘do’ business far better than we talk about it. We know how to run businesses, find capital, and find creative solutions for problems. Our experience is primarily acting as principals, not consultants, and that is how we will assist you. As if we are your partners.

We are good at scrambling, because we know that is what it takes to take advantage of a unique opportunity to buy a company, a property, or a piece of equipment that HAS to be closed in 30 days. We also know what to do when the bank asks for a curtailment, wants more collateral, or asks questions or seeks information they have never bothered with previously.

To review our experience in dealing with business challenges, see our Turnarounds & Workouts section.

NOTE: A word of caution about a problem we are seeing way too much of recently, even in the ‘good markets’ of Oklahoma and Texas, and with solid companies that are paying their bills and making money.  Be aware of this concern with regard to your ‘corporate real estate’: Falling commercial real estate valuations and reduced loan to value requirements nationally have affected the real estate component of many operating companies recently that had previously depended on the equity in their real estate as a part of their borrowing base. The forced ‘right sizing’ of balance sheets because of this phenomena should be anticipated and dealt with proactively if you have leveraged real estate that your bank has collateralized in the same loan as your business operating loans.

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