This Quickguide outlines some practical considerations for companies whose contractual counterparties are experiencing financial distress, including what questions may be asked of the counterparty in relation to its distress and how to negotiate payment terms or recover debts.

1. Overview

In these difficult economic times, companies seeking additional liquidity may turn to alternative sources of financing. Companies with assets that can be monetized (e.g., accounts receivable, intellectual property, real estate, equipment, etc.) may discover a number of options available to them. In particular, accounts receivable financing may be an attractive way for certain companies to obtain working capital relatively quickly.