August 2, 2021 | Advisory


What is the impact of the end of moratoria on your business?

Many companies were heavily affected by the Covid 19 pandemic and survived with state support, including moratoriums.

The end is approaching and another 4 months of moratorium extensions were granted, until the end of 2021. To avoid bankruptcies and a possible financial crisis, the Government announced the Resume and Reinforcement programs, seeking to relieve the banks of any impairments and give them more oxygen so that companies affected by the pandemic can move from a state of survival to a state of recovery.

Banks are being supported and encouraged by the Government to finance companies, but this does not mean that they will relax their criteria for granting financing. We all know that it is necessary to provide guarantees. Many companies find it difficult to provide the guarantees that banks ask for in return for loans. So what can companies do to get the financial support they need?

When obtaining financing, it is normal that those who finance it need to have confidence in the owner and management of the company. To create this trust it is necessary that the owner or management, on their behalf, present in an adequate and structured way the request for financing supported by a credible business plan in a professional format.

A good business plan results in a good understanding of the company's situation, a path to the future and a successful financing/restructuring application.

So what should the funding application contain?

These are the key elements:

• A detailed forecast of future income and expenses;
• A detailed forecast of future cash flows, operations, investments and financing;
• A forecast balance sheet that shows the company's equity situation in the plan's horizon.

Economic and financial projections need a historical basis of at least two years, preferably with values ​​audited by an independent entity.

Additionally, do not fall into the error of presenting only an excel sheet without a description of the company's current situation and the justification of the assumptions made for the realization of forecasts.

Properly prepared, the business plan reinforces the confidence that banks and/or other lenders need to have to fulfill your financing request.

Put yourself in the best position to take advantage of the expected support to get the financing you need, doing it in a professional way.