lls its loan or terminate other lines of credit to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record high of 4484 individuals who were declared as new bankrupts. In the past there were six major local banks with baRevenue is vanity, profit is reality and cash is certainty. In medical analogy, revenue is the food, profit is the water and cash is the oxygen. You cannot pay rent with profit, you can only pay your rent with hard cash. Cash talks, the rest walks.

Just as a critically ill person needs to be administered with fresh oxygen, an ailing company’s immediate lifeline is cash, cash and more cash. Fresh fund injections will provide the fillip needed to get the system moving on an even keel as well as to create stable platforms for growth.

In almost every turnaround situation, there is a troubled project that is bleeding or draining cash at an accelerated speed. For a variety of unhealthy reasons such as neglect, denial or mismanagement, these problems remain unresolved. The turnaround team need to apply the tourniquet and immediately stop the continuous haemorrhage and unrelenting outflow of cash. The turnaround team’s task is to stomp out the fire and slow down the rate of burnt-out. The West would call this “stopping the bull by its horns,” and the East calls it “catching the tiger by its tail.” The managers need to adopt this approach during restructuring. Also they need to promote “corporate catharsis” to purify the system and set the tone of the mode of operation. It is no more business as usual.

Other cash flow problem arises when the bank recalls its loan or terminate other lines of credit to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record high of 4484 individuals who were declared as new bankrupts. In the past there were six major local banks with ban

ny’s immediate lifeline is cash, cash and more cash. Fresh fund injections will provide the fillip needed to get the system moving on an even keel as well as to create stable platforms for growth.

In almost every turnaround situation, there is a troubled project that is bleeding or draining cash at an accelerated speed. For a variety of unhealthy reasons such as neglect, denial or mismanagement, these problems remain unresolved. The turnaround team need to apply the tourniquet and immediately stop the continuous haemorrhage and unrelenting outflow of cash. The turnaround team’s task is to stomp out the fire and slow down the rate of burnt-out. The West would call this “stopping the bull by its horns,” and the East calls it “catching the tiger by its tail.” The managers need to adopt this approach during restructuring. Also they need to promote “corporate catharsis” to purify the system and set the tone of the mode of operation. It is no more business as usual.

Other cash flow problem arises when the bank recalls its loan or terminate other lines of credit to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record high of 4484 individuals who were declared as new bankrupts. In the past there were six major local banks with ba

nhealthy reasons such as neglect, denial or mismanagement, these problems remain unresolved. The turnaround team need to apply the tourniquet and immediately stop the continuous haemorrhage and unrelenting outflow of cash. The turnaround team’s task is to stomp out the fire and slow down the rate of burnt-out. The West would call this “stopping the bull by its horns,” and the East calls it “catching the tiger by its tail.” The managers need to adopt this approach during restructuring. Also they need to promote “corporate catharsis” to purify the system and set the tone of the mode of operation. It is no more business as usual.

Other cash flow problem arises when the bank recalls its loan or terminate other lines of credit to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record high of 4484 individuals who were declared as new bankrupts. In the past there were six major local banks with ba

ng the bull by its horns,” and the East calls it “catching the tiger by its tail.” The managers need to adopt this approach during restructuring. Also they need to promote “corporate catharsis” to purify the system and set the tone of the mode of operation. It is no more business as usual.

Other cash flow problem arises when the bank recalls its loan or terminate other lines of credit to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record high of 4484 individuals who were declared as new bankrupts. In the past there were six major local banks with ba

lls its loan or terminate other lines of credit to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record high of 4484 individuals who were declared as new bankrupts. In the past there were six major local banks with banking officers who understood the sentiments and businesses of SMEs and had close banking relationships with them.

However, in recent years with mergers and restructuring in the local banking scene, only four major banks remain with many of these banking officers retrenched and the bank loans to the SMEs drastically reduced. The banks’ understanding and rapport with the SMEs are lost. The new banking officers are stricter and loans are not given to SMEs, which exceed the banking credit facilities and do not provide proper accounting records. Also, the local banks have shifted their focus to other low-risk and fee-based services. The Singapore SMEs suffer from “corporate asphyxia”, deprived of its vital oxygen supply – cash.

The demands for funds will be there – paying the rental, workers’ salaries, bank loan and interests, implementing new technology, upgrading current equipment, reviving R&D, providing advertising support to brands, training people, acquiring competitors to add critical mass to the company, and so on – the list is endless.

Hence it is vital for the turnaround manager to find ways of improving short-term liquidity, cut costs and at the same time, negotiate new loans from the current lenders.

Measures to improve cash flow include - reducing inventory and disposal of obsolete ones, tightening stock control, increasing the