How Struggling Companies Get an Injection of Business Finance

In the recession of 2009/2010 many companies are going through cash flow problems brought on by poor sales, few new sales leads and financial obligations such as employee payroll constantly looming. Business finance is needed, but seems impossible to obtain. In a downward spiral, the company may easily start to lose their own sense of confidence, lose morale, and lose the confidence of their suppliers. This can be a lethal mix. If suppliers even start to believe in a companies inability to pay the bill, they’ll understandably require it up-front which makes the cash flow much more difficult. Then what about the banks and the company overdraft facility?

Companies such as Financial Rescue in London are key players in the Turnaround Finance industry that generally finds success by injecting business finance into the company through an industry expert who has ready funds he or she would like to invest. They need to believe that the company has a fundamentally sound business model and that the problems can be rectified. If they can, the wealthy expert will provide the business funding and generally take a position on the company board as a director (not necessarily, or usually, a majority director) and advise as to changes that are required. The changes can be painful – but since it’s now a third party that is making the changes they are often more palatable because of the acceptance of the position the company was in and the new capital provided.

Admittedly, business can be tough, and changes in a struggling company can be tough. But now the company has another shareholder and one with experience in the industry segment with a mandate to make changes. The company that was struggling is now in better shape and is returned to financial health. What may have looked bleak now looks bright and the company can continue to trade in a competitive environment, even a recessionary one.