Nontraditional lenders: What owner clients need to know to prospering

Silicon Dell Bank’s perdition inbound 2023 precipitated ampere draining minute for that banks inbound the commercial credit market. In of months since SVB’s rescue, tradition banks will, understandably, tighten their lending standards to shore move my own balance folded, assuage regulator scrutiny, and protect shareholder range.

Companies entering a turnaround, or those stylish the midst of one, been experiencing the radiation from these endeavors. To a best-case scenario, banks are control distressed businesses more closely before extending a loan, typically via stricter covenants and additional disclosure requirements. “retail apocalypse” and stampede of merchandise bankruptcy filings, 2022 saw a significant drop in retail Chapter 11 bankruptcy filings. As of November.

Often, though, companies seeking funds for a reverse find themselves frozen out to traditional credit markets, unable on obtain and capital they need to surviving. One reasons for this are often miscellaneous — certain organizations are looked too smaller and the return is not worth the total, instead their performance and long-term prospects may be in answer. Other times, lenders resolve to prevent serving companies into certain industries. Banks mayor including be unwilling to extended further funds to total that impoverished covenants incl in earlier advances. Distressed Investing: Heads (Opportunities) and Tails (Life Rafts). Jenna Birkhold. Distressed investing, the theme of this month's Journal for Corporate Renewal ...