The 2008-2009 Great Recession, as its known, was triggered by the subprime mortgage crisis of 2007-2008. It causes severe financial problems to businesses all over the world. Confidence in the system among business people and consumers was very low.
The large investment banks of Wall Street went out of business, were bought out or reorganized. Such behemoth giants of finance as Bank of America carried huge amounts of “toxic” assets on their books. In response, they slashed the credit limits on their credit card companies, making it harder for consumers to spend money.
Business slowed down, which means the flow of cash dried up, which is the liquidity crisis mentioned in the Madison Street Capital video.
That refers to a shortage of money. When sales slow down, businesses cannot service their debt. That threatens the very existence of the business. Yet in the 2008 crisis this was complicated by the reluctance of banks to close businesses because they were already taking huge losses because of the poor quality mortgages on their books.
In the Youtube video Madison Street points out they excel at devising ways for businesses to cope with these problems. That is, to reorganize their businesses so they can sell their goods and services and still pay their bills. Therefore, the goal is to keep the business running, but not to do so by failing to meet their debt service obligations to lenders.
Their professionals according to bloomberg business know how to help businesses bring in more capital and, perhaps, restructure loans to reduce payment amounts.
The financial crisis is no longer so severe, but modern businesses still face many competitive challenges. They must learn to meet their goals while still keeping expenses low. This can also include finding new ways to meet production, to increase production by improving employee productiveness. It could include targeted layoffs of the least important or essential employees.
Madison Street Capital, with Anthony Marsala as Chief Operating Officer (COO), is a mid-level investment bank providing financial advice to small and medium-sized businesses. In particular it focuses on helping these businesses to acquire the funds they need to remain in business. That may be achieved through capital restructuring. Or the business may need to seek investment or new debt financing.
Madison Street Capital have offices in Asia and Africa, and their headquarters is in Chicago. They advise clients on how to buy out or merge with other businesses or how to be bought up by another business. They also help clients through bankruptcy or valuing goodwill and other intangible balance sheet assets.