Credit Crisis Over – Perhaps 2009 Stay Of Execution
Mon Feb 22, 2010, 3:27 am | Leave Comment
Let’s hope the credit crisis is over, done with for families as well as businesses, large and small. There are companies that are highly leveraged. That means they use debt to supplement investment in Research & Development and perhaps growth. Therefore, for those companies, the credit crisis is far from over. Some are in deep shit. Many have to renegotiate with creditors this year.
However, that effort may not be as successful the second time around.
CFO online reports
Lenders keen for business
It may sound odd, given the tougher lending criteria of banks, but in some cases lenders are bending over backwards to keep borrowers in business.
Banks not aggressive enough
Some turnaround experts say that banks are not being aggressive enough in dealing with their distressed-loan portfolios. That’s because often times, it is due to an unwillingness on the part of banks to book loan losses or a lack of necessary capital to absorb them.
2010 year of action
But banks won’t wait forever. While many credit agreements were stuck in neutral last year, 2010 will be a year of action for banks.
How does your business stand?
So, will the debt be as forgiving to leveraged companies in 2010, or will many firms simply be unable to find relief from crushing debt loads coming due?
In a Nutshell
How is your business standing as far as credit and debt? Will you eventually come out ahead of the cat and mouse game in 2010 or will it be a repeat of 2009. Let’s hope the credit crisis is ancient history for businesses, especially small businesses.
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