Financing in times of the Coronavirus

Financing in times of coronavirus

The current situation is serious for all companies. Cash is king and enough liquidity is essential. Many corporates have already planned or implemented first immediate measures, especially

► Secure existing credit lines, defer tax payments & work short time (Kurzarbeit)

Despite unlimited political support, there is still no direct liquidity support for mid-sized corporates with more than 50 employees. They rely completely on extensive liquidity loan facilities from state banks (KfW, L-Bank, etc.) channelled via their house banks.

This path takes time, should be well prepared and an immediate start is highly recommended!

Here are our practical tips:

1) Current state analysis

What effects does the current crisis have on the company: – Order situation
– Supply chain/raw material supply
– Production (sick leave)

– Initial estimate of the financial impact (turnover/result) – First countermeasures from management

► Short thematic presentation useful for financiers to speed up the process 2) Liquidity plan

– Implementation of a revolving 13-week liquidity forecast – Analysis of resulting liquidity bottlenecks

► Proposed solutions considering existing financing agreements, which need to be examined 3) Coordination with the house bank

Discussion of the solutions required
– Liquidity loans (KfW, L-Bank etc.)
– Equity support from the federal government (only for larger corporates) – Deferral of existing loan obligations (voluntary/statutory)
– Examination of alternative liquidity instruments (factoring etc.)
– Simulation of covenant tests (check add-backs/normalizations etc.)

► Initial contact with house bank, negotiation and conclusion 4) Implementation

– Immediate application for the necessary measures
– Identification and approach to alternative financing providers – Application for further direct aid as soon as available

Rapid and decisive action is needed. We will gladly support you!

Your Network Corporate Finance Debt Advisory Team

Dietrich Stoltenburg +49 176 2345 7709

Sven Voigt +49 172 2800 828

Nicolas Rusch +49 172 2015 02