Stabilising a commercial enterprise
They are many reasons why your enterprise may face financial difficulties – bad management, recession, etc. In these times you may also face difficulties paying creditors, suppliers and employees.
Selling shares and stakes
Shares are bought and sold on the Bulgarian Stock Exchange in Sofia. Only investment firms can trade on the stock exchange. Investment firms are companies that meet particular legal requirements and are licensed by the Financial Supervision Commission.
The sale or purchase of shares must be done via investment firms. Nearly all banks are licensed as investment firms.
Companies under financial difficulty may also take out loans from banks for operative needs. Different banks place different conditions for approving credit, depending on the credit required, your credit rating, the purpose of the credit, the repayment period and the collateral offered.
Banks charge fees on credit applications and to manage loans, and require other forms of payment based on their conditions and rates. The bank must tell you about these fees, as many of them are deducted when the credit is issued.
Fees are usually calculated as a percentage of the requested credit amount; however, with larger loans the credit recipient may end up with an amount less than initially expected.
When applying for credit, the following documents are usually required:
- credit application form;
- documents certifying legal status;
- financial reports – for the previous two years and for the last current period;
- declaration about the persons who signed the application;
- civil and property status declaration;
- business plan;
- collateral-related documents.
Selling surplus assets
Another way of stabilising your finances is selling surplus assets. Before doing so, however, you need to consider the matter carefully.
Another option is restructuring. Options for achieving better results may also include downsizing or reassignment.
Access to different sources of finance can help overcome financial difficulties.
When filing for bankruptcy is the only option left for a business owner, it pays to cut your losses, initiate proceedings sooner rather than later, and move on to a new project.