R E N TA L BU S INE S S M AT T E R S
Time to Restructure?
Here are a few things to think about when considering debt restructuring
By Mike Farley, EquipOne
ebt restructuring is asking all of your financial Why can’t I do the restructuring myself?
institutions for some forbearance for you, the bor- When you retain a professional to assist you in the restruc-
rower. The forbearance can take many forms, turing of your debt, it usually takes about four weeks to
but it’s designed to match your cash flow with gather all the financial information (depending on what
your debt service over a fixed period of time to keep your rental software you are using), assess the rental opera-
business moving forward. tions performance, build a viable and sustainable cash flow
Restructures can be short term (interest only for 90 model, determine the type of bank restructure you are going
days), or they can be long term (total rework of your to request, and prepare a presentation to your lenders.
debt for a new term). It can be a change in interest rate, If you were to do it yourself, the process would no doubt
it can be adding to the term of your loan, or it can involve take even longer, and would prevent you from focusing
collateral swaps, reduction in fleet, and even adding on the things you do best, such as serving customers.
additional fleet. To understand the problems with doing your own debt
Each and every restructure is based on the individu- restructure, ask yourself the following questions:
al client’s current debt and their ability to pay back the • Do I have the time?
debt in full. The task of doing a debt restructure takes • Do I really know how creditable I am with my banks?
time and can be a very daunting project while you are • Do I have a relationship with the person who is going
trying to drive your business through these very diffi- to drive my request through the proper channels? Do
cult times. I know who the decision maker is?
• Am I dealing with a collector?
The planning process • Am I dealing with the litigation gro