What is Balance Sheet Surgery?
At Metro Capital, we pride ourselves on our unique approach to financial restructuring known as Balance Sheet Surgery™. Using this approach, we have been able to save countless companies from bankruptcy by guiding them through to financial recovery. I’d like to take this opportunity to explain to you what Balance Sheet Surgery is and how it saves companies in financial distress.
Put simply, Balance Sheet Surgery is a process that repairs the balance sheet of a company and resolves financial issues that are keeping the company from succeeding. Typically, these problems are caused by too rapid of an expansion, a failed product launch, the loss of one or more major customers and a variety of other reasons that impact cash flow. By performing Balance Sheet surgery, Metro Capital modifies the near-term future cash flow, improves the balance sheet and creates an effective capital structure to return the company to financial viability. Once the surgery is complete, the company’s financial situation is improved sufficiently enough for the company to go forward and succeed.
Very much like a visit with your doctor, our initial consultation is to find out where it hurts and what is ailing the company. During the initial consultation, we need to see the current balance sheet, the previous and current year-to-date profit and loss statements, aged receivables and payables and the cash flow forecast for the next six to twelve months. Reviewing these financial statements allows us to get a handle on the nature of the liabilities and current financial operations of the company. From this analysis we can determine how much cash is being generated and what assets are available to leverage. It also gives us an overall sense of the magnitude and nature of the debt, which is critical to coming up with the right surgical plan.
Knowing how to rework the company balance sheet, near-term cash flow, and other aspects of the business takes training and experience, much like a skilled surgeon. Metro Capital has that training and experience, and we will come up with the best overall surgical recovery plan for the company. You should expect to be working very closely with us for the first three to six weeks while we construct the plan, as lots of information will be needed during this step of the process. Simply put, your cooperation, availability and rapid response to requests for accurate information guarantees that the surgery will be successful and that the company can recover.
The Balance Sheet Surgery process is a rapid one. We generally have formulated and executed the plan within thirty to ninety days. Of course, some executions may take longer. Regardless of the time frame required, once the plan has been implemented, Metro Capital’s work is done. But if things go awry at any time, we’ve got your back, and will reengage immediately if needed.
If your company is suffering from financial distress, Balance Sheet Surgery may be the best cure. However, every engagement is unique, so the best thing to do is give us a call for a free, no obligations, consultation. Saving companies from bankruptcy, saving jobs and preserving shareholder value is our business at Metro Capital. After almost twenty years we’ve gotten really, really, good at this, so we only charge for our services when we can help you. If your payables are edging towards (or beyond) ninety days, receivables are not being paid in a timely fashion, have multiple merchant cash accounts, unsupportable term debt, or just need additional working capital, give us a call at 703 749 8500.