Commercial Bankers: Using Turnaround Consultants Strategically

There may be times when one of your borrowers asks for your recommendation, or your opinion, on getting someone to help them get their business back on track when things are going south. A client’s proactive step in hiring a turnaround professional indicates their commitment to rectifying issues and enhancing profitability. It’s a clear sign they are serious about their business’s survival and growth. Your recommendation is not only good for your borrower; it may ultimately save the relationship for you.

Recommending a turnaround consultant can also work in your favor when you need to exit a borrower. Telling the new lender that your borrower has engaged some turnaround help adds credibility to the deal. It shows that the borrower acknowledges the business needs help and is working to right the ship, so to speak.

Especially when an exit is not a pretty deal, helping your borrower bring in turnaround help demonstrates goodwill and shows that the business challenges are being addressed. This could help ensure that your bank will get paid off.

Establishing relationships with turnaround professionals in various industries and who have success addressing a variety of business challenges and issues, should be in every commercial banker’s playbook. It’s a strategic move that underscores your commitment to supporting your clients through challenging times and helps facilitate successful exits, thus ensuring stronger and more secure financial futures for all parties involved.

Turnaround consultants can be a lifeline for distressed borrowers. These professionals specialize in stabilizing operations, restructuring finances, and restoring profitability. When you connect your clients with credible turnaround experts, you’re reinforcing your role as a value-added financial partner. This strengthens the trust between you and your client and helps position your institution as a proactive and client-focused lender.

Additionally, bringing a turnaround consultant into the picture can enhance communication and transparency between the borrower and your institution. As consultants assess operational inefficiencies, restructure debts, or optimize working capital, they often help bridge communication gaps and ensure accurate reporting. This creates a smoother flow of information and allows you to better monitor risk, making the relationship more manageable and secure.

In situations where credit deterioration is evident, turnaround professionals often conduct an operational assessment that can offer you insights into the true state of the business. These findings can assist you in making informed decisions about whether to restructure existing terms, exit the loan, or consider alternate financing solutions like asset-based lending or equipment-only loans.

Moreover, turnaround professionals can assist in preparing businesses for a successful refinancing or sale. By addressing financial mismanagement, improving cash flow, and boosting operational efficiency, these experts make borrowers more attractive to new lenders or buyers. For commercial bankers, this means a greater likelihood of full repayment and a smoother transition during the exit process.

From a portfolio management standpoint, turnaround consultants can help reduce credit losses and preserve client relationships. Being able to suggest an experienced turnaround professional at the right moment can differentiate you from other lenders. It positions you as a knowledgeable resource that prioritizes the borrower’s long-term viability, not just your institution’s short-term risk exposure.

When choosing turnaround consultants to recommend, prioritize those with experience in your client’s industry, a track record of successful engagements, and the ability to communicate clearly with all stakeholders. Building a list of vetted consultants allows you to respond quickly when a client’s situation changes.

In today’s complex lending environment, the ability to offer more than capital (by providing informed recommendations for turnaround support) enhances your value as a commercial banker. It demonstrates foresight, industry expertise, and a deep commitment to client success, even during periods of adversity.

Strategically utilizing turnaround consultants is not just a reactive measure; it’s a proactive move that aligns everyone toward recovery and resilience. Whether the goal is to restore the relationship, improve the borrower’s operations, or ensure a successful exit, your recommendation can be the difference between a deteriorating account and a revitalized enterprise.

When a borrower brings in a turnaround consultant, Celtic Capital is ready to complement those efforts with responsive, asset-based financing that fills any capital gap. Our collaborative approach ensures we enhance, not interfere with, your credit relationship.

Whether you’re helping a borrower regain footing or planning a structured exit, Celtic Capital can help make it happen. Contact us to see how we can support your strategy.

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power, and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset-based financing solutions from $500,000 to $8 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or mhafner@celticcapital.com, or visit us at celticcapital.com.