10 January 2005

Ed Cook, a partner in our turnaround and recovery department in Manchester:

"Turning a business around is all to do with timing. Businesses need to seek help at the first sign of trouble before it's too late for us to make a difference. In recent years, most banks have adopted this approach and we've seen a massive growth in the turnaround business as a result. We all realise that there are lots of opportunities to save a business and pulling the plug is becoming a last resort.

"Put simply, banks want to keep their customers and accountants don't want to lose clients and that's the main driver behind turnaround.

"In the case of property turnarounds, we always have a strategic review meeting with the borrower, lender and advisors, to work out the root problems of the business and agree a way forward. In the old days, a decision was made and everyone involved would go along with it. Today however, there's a much more team based approach, and this gets the best results.

"Warning signs of trouble ahead are often missed when an industry is doing well - taking the property industry as an example, while property prices and profits have been soaring, underlying problems have been hidden. When the industry slows down, I expect problems with underperforming assets to come to light.

"In regard to refinancing products, there's been a swing from bank borrowing to asset finance and invoice discounting. A number of years ago, this was frowned upon, but in the light of the Brumark Case, now it's seen as an acceptable alternative way of funding a business. It offers more flexibility to accommodate the needs of the business."

For more information on our Turnaround and Recovery Services visit our Services area