Covid-19 Debt Advisory
The speed with which COVID-19 has spread globally and in Ireland, along with government measures to contain the virus, means there will be a significant financial impact on businesses. As with any crisis, there will be both opportunities and challenges.
- Banks will focus on supporting customers through their various product lines
- To support customers, banks have accelerated their decision-making process in light of the situation
Having held discussions with a number of banks and lenders on the subject, we would encourage companies to undertake the following
Short Term - Do’s
Constantly assess and review your current and projected cashflows. Trading is changing daily and it will be important to monitor cashflows (working capital etc.) and their assumptions on a daily basis. Model and understand worst case scenarios so you know your funding needs.
Review existing bank facilities, engage proactively with your relationship managers, discuss measures such as capital repayment options, extensions to short term credit facilities and the potential to increase prepayment rates on working capital facilities (invoice discounting for 120 day debtors, 95% of debtors).
Early communication with your funders is vital in order to understand your options and the timing for any amendments to existing facilities.
Alternative Funding Options
Existing lender vs. alternatives – Your existing bank will seek to support you in this crisis. In addition, Ireland has an array of specialist lenders who could also assist if the requirement is outside your existing banks appetite.
We Are Here To Help
Use your advisors - banks will take comfort that there has been a full review of the operations of the business and that the scenarios have been considered and tested by an independent party. It will speed up the process. Go to our Mazars Covid-19 support page for more information.
Want to know more?
The economic difficulties facing businesses and individuals in Ireland are severe. The decline in construction and property markets, allied to the banking crisis and global recessionary trends have created a sharp decline in economic activity, business transactions and confidence levels and have prompted a considerable deterioration in public finances.
Mazars Corporate Finance provides strategic advice and practical assistance on mergers and acquisitions, trade sales, debt, private equity, project finance, funding, valuations and MBO’s.