Eyeing the Financial Landscape: ASC Finance Experts Offer Advice on Economy

the managers subordinate their management fees in most instances,”

he adds. “If a center goes into default and through discovery the lender finds out distributions were made prior to default, the lender will usually move forward very quickly to recover their collateral and sometimes require the distributions be added to the collateral pool. If a center communicates with the lender, as with any lender/obligor relationship, the lender is more inclined to work with the center to a mutually beneficial resolution.”

Certain payables can be delayed to improve cash flow, and it is wise to discuss this directly with suppliers who may be able to extend terms from, for example, net 30 to net 45, etc., Fox says.

“If the center has excess cash and is making distributions, it may make sense to divert some of the extra cash into a ‘rainy day fund’ that can serve as an emergency source of cash or become a means to eliminate some of the center’s debt earlier than expected, which would improve the monthly case flow,” Fox says.

Not all advice works for every center, but chances are good that a proactive, informed stance will weather any possible recession better than ignoring it, or running for the hills. 

SIDEBAR:

Start-Up Teams Must Plan Finances Carefully

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