The Consolidator is used as a cleanup tool for short-term payables, operating debt, medium-term loans, and restructuring of long-term debt with other lenders. This loan is normally implemented when cash flow demand outstrips supply and can be a signal that it is time to rethink the existing business plan. New business plans require some time to develop and implement. This product provides our clients with that time to re-think and plan.
Debt refinancing and consolidation can be very useful financial tools, but restructuring debt can be a difficult sell to a financial institution and one that most lenders do not like to hear about, as it can carry some very negative operational indicators. Terming out short-term debt (1 year or less) over a longer period (5 years or more) is never a good idea, but on some occasions it is necessary.
A TLB Loan Officer can help clients make the right decisions when it comes to prioritizing what should be included in consolidation, e.g. the amortization period, repayment schedule, and, most importantly, how to ensure the situation is not repeated.
The good news is that the TLB will consider using the Consolidator to advance credit in difficult situations if a viable plan can be developed.