REASONS FOR LACK OF PCF
Evidence from the available research clearly reveals that some of the main reasons for the lack of PCF is the fact that the legislation is still very new, ill understood and incorrectly applied in practice. The implications of this fact are that the provisions of the Act are interpreted incorrectly as well as sometimes abused. Further, the lack of security available in the business at the time of filing, as well as the poor viability of the state of the business are contributing factors as to why financiers are not advancing PCF. The typical parties that are expected to provide PCF are banks, trade creditors and shareholders, but in reality, most of these parties have not been cooperative or forthcoming with financing due to the fact that they are concerned only with recovering their own money, or they are already too fatigued to advance any more money.
Development financiers were seen as both very promising and suitable parties to provide financing, but all interviewees found their processes too slow and bureaucratic to be able to benefit a business in financial distress. Lastly, the most promising group of financiers identif ied were distressed lenders and private equity investors. However these parties are still relatively unknown in the local market and are themselves trying to make sense of the business rescue provisions and opportunities. Therefore the nascent nature of alternative financiers in SA is a prohibitive factor for the advancement of PCF.