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The Crossroads™ Program

hese are hazardous economic times - global competition, emerging interest rates and inflation, lackluster growth and a substantial contraction of viable financing alternatives. Continuing on the road to prosperity can be challenging. There are numerous points when your lender may feel better opting for the off-ramp from the relationship. When any one or combination of the following are in play, you don't need a roadmap to see why the lender might be compelled to exit.

Exit 1 - A Credibility Gap This is when there is a misunderstanding of the company's condition by the bank or the bank customer cannot understand the lender's concerns.

Exit 2 - Liquidity Gap In this case, the company may or may not be profitable; but an event or series of events has occurred which has strained working capital resources.

Exit 3 - Permanent Impairment The company has no viable plan to address declining profits and is approaching or has entered a liquidity crisis.

Exit 4 - Loss of Confidence in Management Management is consistently unable to meet projections or adhere to plan or has no real plan. Unfavorable surprises arise too frequently. Communication between the lender and the company may be strained.

It doesn't have to be this way. Frequently there is a fork in the road, or as we refer to it, the 'Crossroad', and therefore there is a choice of direction. That choice could significantly influence the future wellbeing of your company.

At the Crossroad, many companies misunderstand the cause of their bank's concern or may not know how to address the concern. The bank sees the cause of their concerns after reviewing accurate or inaccurate financial reports and borrowing base certificates. On occasion, banks do not receive business plans and timely financial reports from their customers. To the bank, this serves as an early warning sign which may indicate fundamental weaknesses in the company which could include deterioration in the business and the bank's position.

What the bank sees are the symptoms. However, the root cause of these symptoms usually lies within the arena of operations and planning. Early recognition of a rift in the relationship coupled with a sound plan of action is paramount to salvaging the relationship and your company. The more delay, the more risk of not only impairing your relationship with your bank, but also impairing your relationship with your customers, creditors and employees.

When the bank starts making noise as if they might take one of 'the exits' and you must react to protect your company the skills, analysis and strategies developed are best created and implemented with the assistance of someone that understands the very unique aspects of the bank workout environment.

With this in mind, Ross developed the Crossroads program to objectively identify whether we are dealing with a mountain or a molehill and to apply the appropriate measure of remedy by using a logical progression addressing the issues at hand.

The Crossroads five step process:

Step 1 - Assess the reality

Step 2 - Create short term stability

Step 3 - Determine the root cause of the problem.

Step 4 - Craft the appropriate strategy to resolve the problem

Step 5 - Execute the strategy

Through the implementation of the Crossroads Program, Ross Honig, with his accumulated professional knowledge, employs a broad set of strategic tools to objectively recognize and effectively isolate the root causes of problems and implement the right solutions to match the challenges your company faces. It takes a broad and highly specialized set of skills to recognize, understand and implement solutions that will endure.

Ross is a professional who can deal with the entire potential spectrum of problems which will improve operations, breed a better borrowing relationship, keep peace with your creditors and foster confidence from your employees. These actions will result in stability for your company, operational and financial improvements that will drive enhanced performance.