Often a business or real estate asset is deteriorating for some time before debtors or lenders find out how bad the situation is or employ adequate analysis and support, resulting in lower recoveries.
Generally, borrowers do not acknowledge their financial difficulties quickly enough or take corrective action to arrest the financial deterioration of their business or assets. Similarly, lenders delay in adequately determining the true condition of a client’s business and assets. This results in erosion of their loan security and reduces their options for recovery.
The lender is often in an excellent position to motivate the borrower to face its problems and undertake corrective action. This in turn increases the options for maximizing the lender’s security.
One of these options is finding the expertise to augment the borrower’s capabilities to deal with its problems.
G-Force Group focuses on five factors that help lenders improve recoveries from their collateral on problem accounts. These include:
- Assessing the debtor’s ability to improve recoveries from its assets
- Determining the problems underlying the borrower’s difficulties and available solutions
- Identifying the opportunities to quickly eliminate the erosion of asset and security values
- Identifying the insolvency or realization framework options suitable for the borrower’s situation and the lender’s security
- Considering how professional costs, ongoing overhead and operating costs, market issues and timing affect the net recoveries under various recovery options
We work with lenders to help them through each of the steps they can take to improve their recoveries including taking formal appointments as a receiver, trustee in bankruptcy or restructuring assignments like proposals to creditors under the Bankruptcy and Insolvency Act, arrangements under the Companies’ Creditors Arrangement Act (“CCAA”) or other specialized appointments.
Our Business Health/Lender’s Response Curve depicts the typical responses of a lender to its client’s deteriorating financial condition.
Whether it is an operating business, a business in distress, a real estate project or investment, a construction project or a hotel or resort property, contact us to see how we might help you with your loan recovery concerns.