Gain an understanding of what the bank’s account team used to support the loan at the time the loan was issued. Determine the goals of the bank and establish a strategy that strengthens the company’s cash flow and improves long term viability.
Meet with the Borrowers and gain an understanding of their business to determine what the business looked like when the loan was made. Then we identify any changes that may have occurred since the loan was issued. We initiate a Green Flag Assessment to identify all possible sources available to improve cash flow such as:
- Tax credits
- Fixed Asset Appraisals
- Structuring Rationalizations
- Cost Reduction Strategies
Diligentiam may recommend that some tax credit studies or asset and expense studies be performed to create losses and credits for prior years to reduce taxes or to potentially obtain refunds from the treasury department for tax over-payments.
Diligentiam will also identify any Red Flags blocking the company from achieving its goals. Areas that will be reviewed include the following:
- Regulatory Evaluation
- Workforce Evaluation
- Management Evaluation
- Market Evaluation
- Financial Evaluation
- Collateral Evaluation
- IT & Cyber Security Evaluation
A summary analysis will be generated that identifies both the hidden revenue found (Green Flag) as well as problem areas (Red Flags) in the business. Dilignetiam will provide a strategic plan that will outline the management process necessary to restore the account into the lender’s portfolio or to transition the borrower to a different lender. All fees and return on investment will be discussed with both the lender and the borrower before engagement.
If needed, the strategic plan will be designed within a time-bound, step-by-step, tactical implementation schedule to accomplish both the borrower’s and the lender’s goals within the desired timeframe. This strategy may include flash reports that provide a snap shot of a borrower’s key metrics and collateral status. An additional engagement would be required to conduct this process.
The Diligentiam Tool Box
Finally, we will take action to initiate the cost reduction, tax savings, and tax refund strategies we have identified immediately and develop a cash flow analysis that shows the forecasted improvement and infusion of cash into the business. This will allow the repayment process to begin.
- Investment Banker that Specialize in Restructuring and Recapitalization
- Connections with Asset-Based Lenders
- Expertise in Seasonal Borrowing Needs
- Merger & Acquisitions Specialist
- Management Buyout Specialist
- Tangible Property Studies
- 1031 Exchanges
- Cost Segregation Studies
- R&D Studies
- International Sales Tax Deduction Strategies (IC-DISC)
- Insurance Cost Reduction Specialist
- Vendor & Customer Contract Cost Analysis
- Business Evaluations
- Accounts Receivable Analysis
- Business Equipment Appraisals
- Lean Management & Operation Analysis
As a result of our due diligence, Diligentiam’s workout strategies will ensure that smaller companies are not put out of business accidentally or unintentionally, hence avoiding instances of unneeded job loss that often result. In the past, workout strategies have been problematic and aggressive, which has created mistrust in both the bank and the borrower. This has led to bad and undesirable outcomes. Diligentiam will work to ensure that all parties involved in the workout strategy achieve a favorable outcome.