What Is Debt Restructuring?

Debt restructuring is asking all of your financial institutions for some forbearance for you, the borrower. The forbearance can take many forms, but it's designed to match your cash flow with your debt service over a fixed period of time to keep your business moving forward.

Restructures can be short term (interest only for 90 days), or they can be long term (total rework of your debt for a new term). There are thousands of potential variances in-between. It can be a change in interest rate, it can be adding to the term of your loan, or any combination of all of the above. It can involve collateral swaps, reduction in fleet, or sometimes adding additional fleet.

When we take on a client at EquipOne, we don't have a fixed plan. Each and every restructure is based on the individual client's current debt and their ability to pay back the debt in full.

As I have said in previous articles, the task of doing a debt restructure takes time and can be a very daunting project while you are trying to drive your business through these very difficult times.

Several of our readers have inquired about my last article in which I indicated how important it is to have the right software to run your business. So look forward to our discussion next week on rental software.

Questions or comments? Contact Mike Farley at mfarley@equipone.net.

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