Spring 2022, optimal conditions for the perfect financial storm

Until a few weeks ago, one of the main topics in the financial sector concerned the resumption of the amortization plans, including the principal amount, for the loans suspended following the health emergency of the last two years.

This recovery took place at a time when the costs for raw materials and procurement were already growing with inevitable repercussions not only on margins but, above all, on the flows that companies could have allocated to support the debt.

The ongoing conflict and the planetary geo-political evolution risk further penalizing the recovery plans for most companies. In addition to further increases in procurement, decreases in volumes could also occur.

The ability of companies to generate the flows necessary to meet the financial debts incurred, which can no longer be extended, risks becoming the focal point for the current year.

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The economic system is still able to assist financial needs, but, especially now, it will be essential to plan the possible scenarios in a timely manner in order to activate tools that allow to avoid critical issues and tensions potentially harmful to the company's operations.

For some time now, banks have accepted the EBA recommendations on the assessment of creditworthiness based on forward looking prospects that companies were able to provide; there are therefore means and skills capable of simulating any type of unforeseen event and highlighting their financial impact as well as the effects deriving from the adoption of mitigation tools.

Thanks to the experience gained over the years, Warrant Hub has created the  Early Warning - Financial Guidelines service , aimed at implementing an organizational - administrative - accounting structure suitable for the prevention of the business crisis and for financial planning.