In our series on the 12 Steps to Financial Recovery we have so far talked about recognizing that there is a problem, mobilizing resources (including your team), trying out some generic treatments (which is the beginning of the process of elimination, really) and then getting a more in-depth diagnosis underway. This brings us to Step 5, which is that of Fiscal First Aid.
The affliction of financial distress is not unlike any other injury that requires first aid; the situation first needs to be stabilized, you’ve got to stop the bleeding, and then provide immediate relief. In some cases, problems that are more severe may not be resolved by fiscal first aid – but providing short-term resolutions may allow give you the time you need to come up with a more permanent treatment.
So back to when your problem needs Fiscal First Aid; the GFOA (Government Finance Officers Association) – who first came up with the steps we’re talking about today – recognizes four particular categories:
• Primary Treatments – Generally the first line of defense and those treatments that provide immediate help and procure long-term resolution
• Treatments to Use with Caution – Should the Primary Treatments not be sufficient, you may use riskier treatment(s) but they in turn may actually worsen the situation. That’s why they should be used with caution
• Treatment to Use with Extreme Caution – This kind of treatment would be used for the near-term financial situation but may ultimately work against the goal of financial stability
• Treatments Not Advised – These include treatments that may cause more trouble than benefits, for instance: accounting manipulations or failure to fund liabilities
Why aren’t we telling you exactly what these treatments are? Because we don’t know exactly what your troubles are. So when you draw up your Fiscal First Aid plan, come up with treatment strategies for all 4 categories and then see what you can do. Don’t judge the treatments – just write them up and categorize them. Then, once you’ve got your picture all planned out, then you see what kind of First Aid combination may work best for you.
The road to recovery is never about going through shortcuts; it’s lengthy and you’ve got to be solution-focused (not just oriented) and that means you will have homework – and lots of it – but it also means that you will be that much closer to a full recovery.
Always make sure that you are making an informed decision at all times,
Capital Corp Merchant Banking 
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