Quick answer: When cash gets tight in a middle market company, the first 30 days determine whether you have a recoverable problem or a fatal one. The fix is a 13-week cash flow model, six specific levers that produce real cash inside 30 days, and a sequenced set of conversations with the bank, vendors, and your team. Done right, you push the runway out 60–180 days and earn the time to fix the underlying operating problems.
Who this is for: You’re running a $30M–$500M company. Cash is tight. The covenant breach is on the horizon, or AR is stretching, or a vendor just put you on COD. You’re trying to figure out what to do this week.
What you’ll get from this article:
- The 13-week cash flow model that has to be running by Friday
- The six levers that move cash in 30 days
- The conversation sequence with the bank, vendors, and the team
- The mistakes that turn a recoverable cash crisis into bankruptcy
Book a strategy call with Bill →
Why cash crises are always operating crises in disguise
A cash crisis in a middle market company almost never starts in the treasury function. It starts in the operating model 6–18 months earlier — a customer mix that quietly stopped paying on time, a SKU mix that quietly stopped covering working capital, an EBITDA story the CFO has been smoothing for three quarters.
Cash hits the wall last. By the time the CFO shows you a 13-week negative, the operating problems are already a year old. You can’t fix the operating model in 30 days. But you can buy enough runway to fix it over the next 12 months. That’s what cash rescue is — buying time so the turnaround can happen.
The first Friday: build the 13-week cash flow
If you don’t already have a 13-week cash flow model, build it this Friday. Not month-end. Friday.
The model isn’t a forecast — it’s a survival instrument. It tracks weekly inflows, weekly outflows, and weekly ending cash balance for 13 weeks forward. Updated every Friday. Reviewed every Monday by the CEO, CFO, and one outside set of eyes.
Four sections:
- Cash inflows by week (AR, deposits, asset sales, financing draws)
- Cash outflows by week (payroll, AP, debt service, capex, tax, professional fees)
- Net cash movement by week
- Ending cash balance by week, with covenant minimums marked
You’re looking for the week the balance crosses zero or the bank’s minimum. That week is your runway date. Every decision from Friday forward is measured against whether it pushes the runway out or pulls it in.
If your CFO can’t build this in three days, you have the wrong CFO for this moment. Hire an interim, a CRO, or a turnaround firm.
The six levers that move cash in 30 days
Most distressed CEOs touch one or two and call it a plan. The ones who survive touch all six.
1. AR acceleration. Run a customer-by-customer aging. Call your top 20 receivables personally. Not the controller. You. Most middle market AR problems are attention problems, not collection problems.
2. AP management. Stop paying vendors on the old terms. Move to a structured payment plan — 50% in 30, 50% in 60 — with written communication to every vendor. Vendors work with a CEO who calls. They cut you off when they find out by accident.
3. Inventory liquidation. Walk your warehouse. Identify SKUs that haven’t moved in 180 days. Discount 30–50% and convert to cash in 60 days.
4. Customer deposits. Require 25–50% deposits on new orders. Offer 2% for prepayment. Unpopular with sales. Right call.
5. Non-core asset sales. Real estate, vehicles, equipment, idle business lines. Decision in 48 hours, execution in 60–120 days.
6. Discretionary spend freeze. T&E, software, marketing without measurable ROI, consulting not tied to the turnaround. Zero unless it produces cash.
Run all six in parallel. By week six, the runway date should move out at least four weeks.
Book a strategy call with Bill →
The sequence that keeps you solvent
Week 1: 13-week model built. Top 20 customers and vendors identified. Runway date established.
Week 2: CEO calls top 20 customers for AR. CFO sends payment plans to vendors. Sales required to collect deposits.
Week 3: All discretionary spend frozen. Non-core asset sale list built. Inventory liquidation in market.
Weeks 4–6: Headcount decisions. Unprofitable customer closures. SKU rationalization on the worst 20%.
Weeks 6–13: Model rolls forward. Bank and board informed weekly. Runway pushed past 90 days, then 180.
The bank conversation
The bank’s worst nightmare is finding out about a problem from the financials instead of from you. Call before the covenant breach, not after. Walk in with three things:
- The 13-week cash flow
- The list of operating moves underway with cash impact and timing
- A specific, narrow, time-bound ask (covenant relief, 90-day waiver, forbearance, maturity extension)
Don’t bring excuses. Don’t bring “we expect things to improve.”
For more, see managing the bank during a turnaround.
What survives vs. what doesn’t
| Action | Companies that survive | Companies that don’t |
|---|---|---|
| 13-week cash flow | Built week 1, updated every Friday | Built month 3, after the breach |
| Bank communication | CEO calls before breach, with a plan | CFO emails after breach, with excuses |
| AR collections | CEO personally calls top 20 | Controller sends statements |
| AP management | Structured plan to all vendors | Stretch by default, no communication |
| Cost cuts | Across-the-board freeze week 1 | Surgical cuts month 2, too late |
| Team communication | Direct, weekly, owns the truth | Silent, then panicked |
Frequently asked questions
How fast can cash rescue actually produce cash?
Real cash arrives in week one if you call AR personally. By week four, 20–40% improvement in cash position from working capital alone is typical.
When do I need to hire a CRO or turnaround firm?
Runway under 90 days, bank has lost confidence, or you can’t get your team to execute the discipline. If you’re unsure, you probably already need help.
Will I lose customers and employees?
Yes, some. The customers you lose were almost always the unprofitable ones you should have fired anyway. The employees you lose were almost always the ones who couldn’t handle the discipline.
Is this the same as bankruptcy?
No. Cash rescue is what you do to avoid bankruptcy. Executed in the first 60 days, most middle market companies avoid formal restructuring.
The bottom line
A cash crisis isn’t the end of a middle market company. It’s the moment the operating discipline you’ve been avoiding becomes non-optional. Build the 13-week model on Friday. Call your top 20 customers next week. Talk to the bank before the bank talks to you.
If you’re 90 days or less from the runway date, book a 30-minute strategy call this week.
