INTANGIBLE CAPITAL VALUE

by Erwan COATNOAN DE KERDU

Your copilot in creating a successful company

Bad balance sheets: how to get credit?

  by Erwan Coatnoan de Kerdu

The company’s latest accounts show declining figures, or even losses. It is difficult to convince potential investors or creditors under these conditions. Here are a few tips to implement in order to ensure that the bank will follow up on the financing.

The company’s latest accounts show declining figures, or even losses. It is difficult to convince potential investors or creditors under these conditions. Here are a few tips to implement in order to ensure that the bank will follow up on the financing.

Be truthful about the company’s situation

In order to continue to receive investments and bank credits, the company in difficulty should not try to hide its results from the bank. This would be a big mistake, and bankers are not fooled. If the manager seems hesitant and hides his results, it is because they are bad. And this type of evasive behaviour does not inspire confidence. On the contrary, being aware of one’s difficulties and understanding them is a sign of maturity for the company. Banks are more likely to trust a company that accepts its mistakes without trying to hide them.

When faced with financial difficulties, the best thing to do is to pick up the phone and contact your bank to make an appointment. Presenting your results and trying to find solutions is a perfectly appropriate behaviour in this situation, especially for the company manager. Facing up to the situation and dealing with an unpleasant truth is not easy, but it is an additional guarantee of credibility.

The crisis is not the only one responsible: try self-diagnosis

In recent years, many companies have decided to blame the economic crisis. The more the years go by, the more this “excuse” loses credibility. No company is perfect. You have to question your decisions when necessary. If the balance sheets are bad, it is not by chance. One or more problems are hindering the company’s activity and growth. Ideally, one should try to understand how the company got there and determine new strategies to put it back on track: promotions, various campaigns, new products, etc. The time has come for the business owner to take stock of his or her skills and those of his or her employees. Does the company have everything it needs to grow? Is it necessary to hire or train employees?

Determine a credible strategy to return to profitability

The return to general growth is still a utopian idea that all companies will grow significantly. Every strategy and every decision matters to the company, and these depend on the leader and the team. To improve the company’s performance, it is essential to understand its problems and to find solutions to them. Of course, it is equally important to implement new strategies, more or less different from the previous ones, in order to turn the company and its results around. If the policies implemented so far have not been successful, a change of strategy should be seriously considered.

Opt for effective practices, such as strategic intelligence, marketing campaigns, developing your e-reputation… The idea is to change and modernize a system that is not working. And during the meeting with the bank, present a logical and credible project, so as to obtain the support of your banker. Accompany yourself with an advisor (a chartered accountant for example), who will support your reasoning and your general project.

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