Tatums Liquidity Protection Solution
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Tatums Liquidity Protection Solution

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Do you feel confident that your middle market clients are prepared to deal with today’s economic climate? ...

Do you feel confident that your middle market clients are prepared to deal with today’s economic climate?

There is no doubt that during these economic times it is essential that your borrowers need to focus on credit and liquidity on a proactive basis. By doing so they assure that there will be adequate working capital and, most importantly, avoid missing loan covenants or finding themselves in any type of default.

We can help with our Tatum Liquidity Protection Solution…a high value service that enhances your bank’s ability to deal with the turmoil of today’s financial markets that your borrowers are facing.

Your clients need help focusing on working capital


Typically the financial function in a middle market company is tactical rather than strategic and the CEO is focused on revenue generation. This combination could lead to surprise covenant misses and damage the quality of your loans.

Making you aware of the Tatum Liquidity Protection Solution can make all the difference in bringing the operational insight needed to review working capital and help your borrower meet those covenant requirements.

Everyday bankers are turning to us to help them solve their borrower’s credit and liquidity challenges. Do not delay, give us a call and learn how Tatum’s Liquidity Protection Solution can help your client meet their loan obligations and give you peace of mind.

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Tatums Liquidity Protection Solution Tatums Liquidity Protection Solution Presentation Transcript

  • Tatum Liquidity Protection  Maintaining a Comfort Zone in Turbulent Economic Times
  • What is Tatum’s “Liquidity Protection” Solution?
    • A low cost solution for both lenders and borrowers
        • Provides an independent 3 rd party assessment
        • Looks forward 12 months
        • Delivers base case and worst case scenarios for liquidity and covenant compliance
  • The Credit Elephant in the Room
    • Middle market companies are now feeling the impact from higher energy, raw material and financing costs
    • Middle market delinquencies are on the rise
      • Reduced collateral values making way into borrowing base
      • Accounts Receivable timings are lengthening
      • Consumer spending behavior is adjusting to the economic times
      • Equity is on the decline
    • During dot com bubble delinquencies ran 10% to 11%
  • Benefits to Lenders
    • Protection against portfolio accounts moving into workout/reserve status
    • The analysis makes sure there are no covenant misses during a reporting period
    • Allows bank and client to take preventative measures to avoid need for covenant waivers
    • Help to avoid penalties associated with reserve or workout
    • Objectivity
  • Benefits to Borrowers
    • Prevents business disruption caused by liquidity shortfall and limited access to new debt
    • Avoids costly and damaging waiver or forbearance fees
    • Provides finance function with an independent perspective of future performance
    • Anticipates problems and proposes solutions in order to build tremendous credibility with lenders
    • Objectivity
  • Initial Process
    • Review past 4 quarters of covenant compliance and liquidity position
    • Forecast next 4 quarters of compliance and liquidity to set base case by utilizing current run rate, operating and capital budget
    • Meet with management to determine parameters for worst case, including lower asset appraisals and reduced availability
    • Provide an objective analysis of findings to management with recommended action items
    • We recommend planning to build a comfort zone if base case projections do not exceed liquidity or compliance minimums by at least 10%
    • Communication protocol
  • Ongoing Protocol
    • One day quarterly review
      • At time of covenant compliance
      • Review variance to forecast
    • Prepare new rolling 4 quarter forecast
    • Determine if there is a need for course correction
  • When best to request the Tatum “Liquidity Protection” Solution
    • Stressed or changing management
    • Repeated missed projections
    • Inventory build not supported by sales
    • Waiver required
    • Financial leadership that is not strategically focused
    • Advance at or near limit
    • Deteriorating asset valuation
    • When independent 3rd party review is needed
    • Industry is in turmoil (retail, building supply, real estate, etc.)
  • Why Tatum?
    • Our professionals are operating executives with senior level execution expertise in finance and technology and are not influenced by best case forecasts
    • We have the experience to immediately get the job done and we have completed hundreds of assessments across all industrial sectors
    • We add strategic perspective at a senior level while most internal finance departments are resource constrained and focus strictly on tactics
    • We help when a liquidity crises or the need for rapid expansion in debt instruments can fatally damage a business
    • Tatum’s “Liquidity Protection” Solution is a high value solution that helps to insure success when capital markets are in turmoil for an indefinite period
  • About Tatum
    • Tatum is the largest and only Executive Services firm in the U.S. with a singular focus on helping companies maximize the Office of the CFO to accelerate business performance and create more value. We work with companies of all sizes who need decisive leadership, talent, capacity, and access on an immediate basis. We understand the urgency of NOW and respond quickly to deliver the right executive and a highly flexible team of resources to address the most pressing problems facing the Office of the CFO.
    • Let us help create more value for your firm
  • Solutions for the Office of the CFO Restructuring – Liquidity Protection – CFO Agenda  Tatum - create more value  [email_address]