Reviving True Loan Management: A Modern Approach with CORFinancial

Not long ago, loan officers were adept at comprehending the intricacies of a borrower’s business, using the three “C’s”—Capacity, Collateral, and Character—to assess borrower worthiness. These officers not only facilitated loans but were actively involved in managing any issues that arose, ensuring a comprehensive support system for financial undertakings. Today, however, the scenario has shifted significantly.

The Shift in Loan Management

In contemporary banking, loan approvals are predominantly based on the “current” circumstances at the time of application without a continuous understanding of changing dynamics like rate increases, pandemics, or regulatory delays. When these circumstances shift, the default response often involves transferring the account to special loans departments. These departments, however, lack the mandate or training to restructure troubled loans effectively. They often pressure borrowers to refinance under the threat of appointing a receiver to sell assets and recover loans, acting more as “undertakers” rather than problem solvers.

CORFinancial’s Niche in Restructuring Loans

CORFinancial has distinguished itself in the finance industry by specializing in the intricate process of loan restructuring. Renowned for its adeptness in navigating and resolving complex financial dilemmas, CORFinancial has become a trusted partner for both borrowers and lenders. Our team’s expertise lies not just in managing typical loan scenarios but in creatively addressing and restructuring distressed financial situations to ensure long-term viability and sustainability.

Our approach involves a deep dive into the borrower’s business model and financial health, allowing them to tailor solutions that align with both the borrower’s needs and the lender’s risk management requirements. This proactive engagement often leads to improved financial outcomes, helping businesses avoid the pitfalls of bankruptcy and maintain operational continuity.

Case Study: Strategic Restructuring in Action

Let’s look at how CORFinancial’s approach transformed a well-established manufacturing company:

  • Background: The company was traditionally debt-averse, owning significant assets including their building and machinery. With all receivables current and inventory levels well managed, they required funding for expansion during the COVID-19 pandemic.
  • Initial Solution: CORFinancial facilitated a one-year mortgage through its sister company to support the company’s immediate growth needs.
  • Continued Support: Upon the maturity of the initial mortgage, and with sales levels not yet meeting projections, the company needed further refinancing to purchase additional equipment.
  • Comprehensive Refinancing Package: CORFinancial arranged a refinancing package that included a term and revolving facility sufficient to cover the existing mortgage, additional funding for receivables, inventory, and an equipment loan, totalling $6.5 million.

This case study exemplifies CORFinancial’s ability to structure complex financing arrangements for businesses of various sizes, sometimes exceeding $20 million.

Revitalizing Loan Management

The setting of loan management has undoubtedly evolved, but the need for insightful, supportive financial partnerships remains constant. At CORFinancial, we are committed to reviving the art of true loan management by providing tailored solutions that respect the unique challenges and strengths of each business. If your company is navigating financial complexities or facing operational challenges that require astute financial restructuring, reach out to us. Let’s explore how strategic financial solutions can secure your company’s future and foster sustainable growth.

Contact us today to discover how we can transform financial challenges into opportunities for your business.