One of the major advantages of loan workouts is that negotiations can be conducted in private. In some situations, the entire process can be resolved without any publicity, thereby avoiding uncertainty among customers and suppliers, and any consequent instability to the business. Even in cases where the disclosure of a company’s financial problems is unavoidable, for example to meet local stock exchange requirements for quoted companies, the parties involved are usually able to manage communication flows better outside a statutory process.

The participants in a loan workout are able to retain control over the transaction, rather than relinquishing it to the court. As a result, the final outcome more closely reflects the needs of the participants most affected by the company’s problems. The ability to control the process also results in flexibility. Provided the needs of the participants are met, the process (for example, the timetable) can be varied to respond to the prevailing circumstances. This is often impossible under a court-administered process.

The range of solutions possible, for example, the use of innovative financial instruments, is often greater under an out-of-court process. Less reliance on the legislation and judiciary can overcome many of the other shortcomings associated with statutory processes highlighted previously in this chapter. For example, transactions can usually be completed quicker, and with more focus on commercial issues. The fact that it is up to the participants to agree a financial restructuring and ensure the rescue of a company, rather than delegating that responsibility to a third party, can also engender greater ownership and commitment to the process.