Here are some signs of financial stress or distress:
  1. Multiple amendments to your Company's credit agreements or ongoing requirement to seek covenant waivers or forbearance.
  2. Traded debt that now has a yield of 13% or more and original creditors departing.
  3. Stock trading near 52-week lows and dropped coverage by research analysts.
  4. Primary business in an industry with competitors filing for bankruptcy, retaining turnaround advisors, or struggling to obtain new financing.
  5. Significant debt accompanies by declining revenues and EBITDA, the loss of a major customer or consistently not achieving financial forecasts.
  6. More  inbound inquiry about your company's financial conditions from key customers and suppliers and asking for an in person meeting with senior management.
  7. New members in bank group that have acquired debt at a discount of more than 5-10 points.
  8. Lenders asking for a 13-week cash flow.
  9. Banks suggesting 2nd or 3rd lien financing or exchange offers to address maturing bond debt.
  10. Lack of meaningful engagement by financial sponsors or traditional capital sources.


If your Company is experiencing any of these, please consider reading more from the following materials or contact us for a confidential, no-commitments discussion: 

"Addressing the Early Signs of Financial Distress", a white paper by Steven Strom.

"Recognizing the Signs of Financial Distress" article from The Bankruptcy Strategist, November, 2017.

"The 9 Biggest Financial Warning Signs" article from Entrepreneur November, 2014.

"Spotting Companies in Financial Distress" from Investopedia.


Other insightful sources include:

Journal of Corporate Renewal by Turnaround Management Association.

Newsroom at American Bankruptcy Institute.

Corporate Financial Distress by Edward Altman.