Who saw this one coming? It certainly wasn’t me, and I am as surprised as everyone else. Supply chain disruptions have begun to affect businesses across a very wide spectrum. Panic buying in the industrial world has created serious inflation challenges.
Businesses in some sectors have been able to pass on price increases dollar for dollar. The food industry is one example. Others haven’t been so lucky and will begin to have cash flow problems as revenue drops while most costs remain fixed. Even companies with excellent management have been caught blindsided and are now struggling to find alternate suppliers or even rejuggling their product mix in order to maintain standard gross margins.
Out of all this comes the unexpected debt problem. Highly leveraged businesses that were doing okay throughout the pandemic but who are now faced with supply-chain challenges are going to find it difficult to maintain a calm relationship with their lenders. These supply-chain challenges are not going away soon, so let’s hope that borrowers and lenders work together to ease the strains.
I’m afraid that a great number of borrowers aren’t going to be able to placate their senior lenders. A lot of churning is about to take place. There is help for those businesses who need to make new arrangements.
Capital Access Partners has the experience and contacts to arrange workable financing for borrowers who need a compatible lending partner.
We at Capital Access Partners are firm believers that businesses seeking capital of any kind should pay maximum attention to compatibility with their capital providers. Optimal Pairing™ = Optimal Results.
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