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Turnaround scenarios are a normal part of business: on average, 80 percent of companies will find themselves in a crisis situation within 10 years. In a phase of restructuring, factoring frees up the liquidity needed, minimises risk and spurs renewed growth. Financing is provided by the immediate advance of outstanding invoices linked to completed orders. Paid receivables are available as working capital within 24 hours of invoice submission. With A.B.S. full-service factoring, your company also benefits from coverage against bad debt losses and the outsourcing of receivables management.
If a company gets into difficulty, it soon ends up lacking the liquid funds it needs to invest in future business or to settle its own liabilities. A factoring solution quickly and permanently helps to eliminate liquidity shortfalls.
In A.B.S. Factoring AG, you’ve got a financing partner who knows exactly what’s important during turnarounds and who will support you with all of their expertise and individual financing solutions!
Accounts receivable are used as security for the advance during restructuring. This facilitates the implementation of factoring solutions in crisis situations where bank financing is not possible. A.B.S. Factoring AG will support you through a phase of restructuring as a solution-focused partner. Our high level of specialist expertise and customised financing solutions have already convinced around 100 corporate clients in Switzerland.
When in the process of restructuring, factoring is often a very useful tool for consolidating a company’s financial situation. Aside from providing the necessary financing, A.B.S. full-service factoring eases the pressure on internal resources by taking on receivables management. This includes prior credit checks of clients and the monitoring of payment discipline. These measures serve to optimise cash flow management and help companies retain capital where possible. At the same time, comprehensive coverage against bad debt losses averts unpleasant surprises linked to debtor non-payment.
Where a turnaround is necessary, minor adjustments are no longer sufficient to stop your business from collapsing, painful cuts are needed. The main aim of restructuring is to improve profitability fast. A properly thought-out crisis concept is needed to return a company back to its road to success.
For a company to make clear decisions, it must first identify the risks it faces. Internal factors (such as working processes) and external conditions (such as partners along the value chain and the competitive environment) are analysed in great detail.
Since process flows and interrelationships are frequently multi-faceted, sufficient time should be allowed for the analysis. Symptoms that appear as problems from the outside can have complex and interlinked causes.
Having identified weak points inside and outside the company, appropriate decisions must be made. Such decisions may include the outsourcing of costly or non-profitable business areas, a change of market position or an entirely new business model. Since change leads to insecurity for employees, restructuring must always be accompanied by a communication concept that explains the reason and purpose behind forthcoming changes to staff members.
As part of many realignment programmes, business models are thoroughly overhauled; processes are revised and new partnerships and cooperation agreements are initiated. To implement these measures, it is essential to appoint responsible people and define interim targets. Effective monitoring and controlling mechanisms should also be prioritised during restructuring. To ease cash flow and profits quickly, steps to bring about rapid results should be introduced alongside the medium- and long-term measures.
Sufficient financial scope is required to achieve operational and strategic objectives. In many cases, factoring is the most suitable financing tool in a phase of restructuring. In addition to gaining sufficient liquidity, a company can improve its equity ratio by converting outstanding receivables into cash and cash equivalents. With a full-service factoring solution, companies also benefit from several other advantages. (Link to advantages of factoring).
A sophisticated early warning system helps to monitor risks and prevent further business crises. Such a system uses warning indicators to alert management to a need for action and thereby defuses potential risks at an early stage.
Would you like to find out more about factoring and financing? Our experts would be delighted to get in touch with you.
