Your financier is not your enemy

Michael Fingland

Executive Director and CEO

Open and candid communication with financiers is crucial in a turnaround situation. However the majority of businesses fear their financiers reaction so they stop communicating. When a company is struggling financially, it is natural for financiers to become concerned about the company’s ability to repay its debts. If communication breaks down or becomes opaque, financiers may lose trust in the company’s management and be more likely to take drastic measures, such as calling in loans or appointing Receivers.

On the other hand, if a company’s management team communicates openly and honestly with its financiers, it can help to build trust and alleviate concerns. By keeping financiers informed about the company’s financial situation, management can demonstrate that it is taking proactive steps to address the issues at hand. This can help to reassure financiers that their investment is safe and increase the likelihood that they will continue to support the company.

Furthermore, open communication can also lead to better collaboration and problem-solving between the company and its financiers. If financiers understand the company’s challenges and constraints, they may be more willing to work with management to find solutions that are mutually beneficial. This can include restructuring debt or providing additional financing to support the company’s turnaround efforts.

In short, open and candid communication is essential in a turnaround situation. By being transparent with financiers, a struggling company can build trust, facilitate collaboration, and increase the likelihood of a successful turnaround.

Categories : , ,
Scroll to Top