Every distressed business I work with has a clear picture of their creditor landscape.
There’s the bank facility with covenants at risk. The supplier base carrying extended aging. The tax authorities with overdue liabilities. Employee entitlements accruing. Sometimes secured creditors. Sometimes unsecured.
These creditors are visible. They have names, balances, and terms. They send statements. They make demands. They negotiate. They appear on balance sheets and in cash flow forecasts.
But there’s one creditor that never appears on any stakeholder list, never sends a demand letter, and never sits across the table in a workout discussion.
TIME.
Time extracts more value from distressed businesses than all the other creditors combined.
Time Doesn't Negotiate—It Accumulates
Here’s what makes time particularly dangerous: it charges compound interest while appearing completely passive.
While you’re managing bank covenants and negotiating supplier terms, time is quietly working in the background of your business.
Customer confidence begins to erode. Not because they know the details of your financial position, but because service levels slip, key people leave, and something just feels different.
Your best employees start taking calls from recruiters and start exploring what else is out there. By the time they resign, they’ve been mentally checked out for months.
Competitors sense vulnerability and start making moves. They’re calling your customers, poaching your staff, positioning themselves as the “stable alternative.” Every week you’re distracted by crisis management is a week they’re building momentum.
Strategic options expire. That buyer who was interested three months ago has moved on. That partnership opportunity has gone to someone else. That refinancing window has closed. Time doesn’t keep options open while you figure things out—it closes them.
Every week of delay doesn’t just add another week to the problem. It multiplies the complexity and cost of every potential solution.
The Acceleration of Cost
A cash flow issue that could be resolved with one difficult conversation with your bank in month one requires a complete operational restructuring, asset sales, and stakeholder negotiations in the next few months.
A supplier relationship that could be preserved with early, honest communication about payment timing becomes a legal dispute when they discover through their own credit checking that you’re in difficulty.
A management team that could be retained and motivated with transparent leadership starts planning their exits when they sense you’re not being straight with them.
A customer relationship that could survive a hiccup in month one is gone by month three when they’ve had time to qualify alternatives and convince themselves the switch is necessary.
The mathematics of distress are cruel: problems multiply while solutions divide.
The Calculation That Costs Everything
The business owners in distress are not in denial.
They see the warning signs. They understand the trajectory. They know there are issues that need addressing.
But they’re making a calculation, often unconsciously: “This isn’t urgent enough yet. I’ll deal with it when it becomes serious.”
This calculation is perfectly rational from a psychological perspective. You’re already overwhelmed. You’re fighting fires daily. You’re trying to keep the business operating. Adding another crisis to manage—particularly one that requires difficult conversations and uncomfortable admissions—feels counterproductive.
So you wait for the “right time.” You wait until it’s “serious enough” to justify the disruption of addressing it.
The problem is that “serious” gets defined by how it feels, not by what time is actually costing the business.
By the time a situation feels serious enough to act—when the bank sends the formal notice of default, when your largest supplier cuts you off entirely, when your head of sales resigns without warning—time has typically been compounding interest for months.
The situations that feel manageable are often the most expensive. Because “manageable” means you still have options, and options are exactly what time is taking from you while you manage.
The Paradox of Action
This creates a cruel paradox:
When you have options, taking action feels premature. It feels like overreacting. It feels like admitting defeat before you’ve even tried to fight. It’s uncomfortable because you’re making a difficult choice when theoretically you could still avoid it.
When you’ve run out of options, taking action feels obvious. It feels necessary. It feels like the only rational path forward. It’s still uncomfortable, but at least it feels justified.
But here’s what I’ve learned watching hundreds of businesses navigate distress:
The discomfort of acting early is temporary. The consequences of acting late are permanent.
Decisions made when you still have leverage feel like choices. You’re selecting from alternatives, each with trade-offs, but you’re driving the process.
Decisions made after time has collected its debt feel like capitulations. You’re accepting the only remaining path because everything else has closed off.
The Invoice You Never See
Time charges compound interest that never appears in your financial statements.
There’s no line item for “opportunity cost of three-month delay in addressing declining performance.”
There’s no invoice for “erosion of customer confidence during period of visible instability.”
There’s no payment schedule for “loss of strategic optionality due to stakeholder fatigue.”
But the cost is real, and it’s expensive.
Every customer who switches to a competitor because they got nervous about your stability—that’s time charging interest.
Every key employee who leaves because they lost confidence in leadership’s grip on the situation—that’s time charging interest.
Every potential buyer who moves on to other opportunities while you were still hoping things would turn around—that’s time charging interest.
Every additional month of deteriorating results that weakens your negotiating position with creditors—that’s time charging interest.
The businesses that successfully navigate distress aren’t necessarily the ones with the strongest balance sheets or the best market positions or the most patient creditors.
They’re the ones that recognized time as a creditor early in the process—before it transitioned from creditor to collector.
What Recognition Looks Like
Recognizing time as a creditor means acting when action still feels uncomfortable because it’s “too early.”
It means having the difficult conversation with your bank before you breach covenants, not after.
It means being transparent with key suppliers about payment timing before they discover it themselves.
It means talking honestly with your leadership team about the situation before they hear rumors from their networks.
It means exploring strategic alternatives while you still have alternatives to explore.
It means making decisions based on what time is costing you, not on when the pressure to act becomes psychologically unbearable.
Because once time transitions from creditor to collector—once it starts demanding payment rather than quietly accruing charges—you are running out of options.
The businesses I’ve seen recover successfully are the ones that paid time before it started collecting.
The ones that didn’t… well, time always gets paid. One way or another.
The cost of ‘not yet’ is always ‘too late’.
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