British Columbia Association of Insolvency & Restructuring Professionals

British Columbia Association of Insolvency & Restructuring Professionals

November 24, 2008 09:01 ET

British Columbia Association of Insolvency & Restructuring Professionals: B.C. Businesses Not Immune to the Global Slowdown

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 24, 2008) - Recent headlines have painted a picture of a rapidly changing and frightening business environment for Canadian businesses. Consistent with global trends, Canadian lenders are tightening their lending practices on the heels of the collapse of some of the world's largest financial institutions. This has resulted in fewer options for businesses, because of lower borrowing limits, tighter credit options and higher costs of borrowing. With the daily wild fluctuations in the stock markets, the uncertainty in the value of the Canadian dollar and decreasing business and consumer confidence there is no clear vision of how the current economic crisis will affect Canadian businesses.

Even for those companies that have not yet felt the full impact of reduced demand due to recessionary concerns, tougher credit rules may lead to a number of surprises for businesses looking to refinance maturing debt. For those companies who are already dealing with falling revenues, their options to maintain their financial health are becoming increasingly limited.

For the past few years BC has enjoyed a construction boom fuelled by the 2010 Olympics and its many related projects. However, we have seen more recently many large construction projects, particularly those involving multi-unit residential, either cease work or enter insolvency processes. In addition, some of BC's largest forestry companies have sought formal restructuring proceedings, as this industry faces ongoing challenges in its quest to return to profitability.

BC is not immune to the economic issues facing the world, and the message to BC businesses is clear: now is the time to get your economic house in order. For companies facing economic challenges today it is not expected that their options will improve any time soon. Accordingly, here are some pointers to consider for navigating through these times:

1. Get closer to your bank and treat them as your partner;

2. Be relentless on cost control;

3. Re-evaluate the credit worthiness of your customers;

4. Re-evaluate your sources of supply and terms with suppliers;

5. Consider deferring capital investment plans;

6. Get smarter on tax matters; and

7. Finally, remember that CASH IS KING!

For those BC businesses that are concerned with their current financial situation, they should talk with a Chartered Insolvency and Restructuring Professional (CIRP). Waiting until "the wolves are at the door" is more hazardous than ever before given the current economic environment and limited financing options.

To arrange an interview, contact Mark Wentzell at (604) 433 2173, or mwentzell@grantthornton.ca. For more information about how Chartered Insolvency and Restructuring Professionals can help, visit bcairp.ca.

BCAIRP is a provincial not-for-profit organization representing insolvency and restructuring professionals in British Columbia. Its general members are identified by the CIRP (Chartered Insolvency and Restructuring Professional) certification mark, which is gained through a combination of study, work experience and licensing as a Trustee in Bankruptcy.

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