The Fractional CFO and Liquidity Crisis Management: Stabilising Cash in 90 Days

Fractional CFO - Liquidity Crisis: the 90-Day Plan

In the ecosystem of the Spanish mid-sized company there is a financial axiom as relentless as it is neglected: companies do not go under for lack of accounting profit, they go under for lack of cash. It is painfully common to find companies with record order books, solid competitive advantages and apparently healthy balance sheets that, almost overnight, find themselves unable to meet payroll or the maturities of their critical suppliers. It is what in corporate finance we call technical insolvency or a liquidity crisis: the EBITDA exists, but the cash has vanished.

The 2025 data confirm this phenomenon is not anecdotal. According to the Colegio de Registradores, in the first quarter of 2025 there were 15,384 insolvent debtors, 87.6% more than a year earlier, the largest increase since 2013. And, in the first nine months of 2025, 40,042 companies and self-employed persons entered insolvency proceedings - versus 27,730 in the same period of 2024 - a 44.4% rise. For the whole of 2025, according to Informa D&B, trade led insolvencies with 1,257 proceedings (26% of the total), followed by construction and real estate (930), industry (569) and hospitality (548).

Faced with this scenario, the instinctive reaction of many boards of directors and business families is to turn to large multidisciplinary firms. There is a more agile, surgical and execution-oriented alternative: the immediate incorporation of a fractional CFO specialised in special situations. This article describes, step by step, how an external CFO stabilises a company's cash in 90 days without taking operational control away from its owners.

1. The anatomy of a liquidity crisis

Before acting, you have to diagnose. A liquidity crisis is almost never a sudden accident: it is the visible outcome of a silent deterioration of working capital that accrual accounting conceals. The external CFO's first task is to reconstruct the real picture with three classic magnitudes.

Working Capital (WC):

WC = Permanent Resources − Non-Current Assets

(or, equivalently, WC = Current Assets − Current Liabilities)

Operating Funding Requirements (NWC needs):

NWC needs = Inventory + Receivables − Payables

Structural cash position:

Cash = WC − NWC needs

When the operating funding requirements grow above working capital - typical in companies that grow fast, lengthen their collection periods or accumulate inventory - the difference is financed with short-term debt. And that is where the problem begins: the company is profitable, but every euro of growth consumes cash instead of generating it.

To this analysis it is worth adding the Cash Conversion Cycle (CCC), which measures in days the time a euro invested in working capital takes to return to cash:

CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) − Days Payable Outstanding (DPO)

Reducing the CCC is, in practice, releasing cash without touching the income statement. Many companies discover, on calculating it for the first time, that they finance their clients free of charge for 90 days while their suppliers demand payment at 30. This is where the analysis of free cash flow as a barometer of financial health is more revealing than any profit and loss account.

The macro context aggravates the situation. Although the Banco de España notes that credit-granting criteria to companies remained stable for much of 2025, in the fourth quarter the conditions applied to new corporate loans tightened moderately, with rate and margin increases due to the higher perceived risks. In parallel, private credit is gaining ground. When traditional banking retreats, the company that does not control its cash runs out of oxygen. Detecting these signs in time is the first step: it is worth becoming familiar with the warning signs for refinancing debt before the problem becomes irreversible.

2. The 90-Day Shock Plan

The methodology we apply in our external financial management service is structured in three sequential 30-day phases. The goal is not only to put out the fire, but to rebuild the company's financial credibility with banks, suppliers and shareholders.

Phase I (Days 1-30): Stabilisation and damage control

Real cash audit and Runway calculation. The first thing is to know how much life the company has left. The runway measures how many months the company can survive at the current pace of cash consumption:

Runway (months) = (Available Cash + Available Facilities) / Monthly Net Burn Rate

Where the Net Burn Rate is the difference between monthly collections and payments when it is negative. If the runway is below three months, we are in the red zone.

Rolling 13-week cash forecast using the direct method. This is the central tool of all crisis management. Unlike the indirect method (which starts from the accounting result), the direct method projects real collections and payments, week by week, over a 90-day horizon. A typical structure would be:

• Opening bank balance (week n)
• (+) Collections: by business line, main clients, other inflows
• (−) Payments: critical suppliers, payroll and Social Security, taxes (VAT, withholdings, payments on account), debt service (principal + interest), unavoidable CAPEX
• (=) Weekly net flow
• Closing bank balance (which becomes the opening balance for week n+1)

The model becomes rolling: on closing each week with real data, a new week is added at the end, always maintaining the 13-week window. This discipline - an operational variant of the rolling forecast as a flexible planning tool - allows cash deficits to be anticipated weeks in advance instead of discovering them on the maturity date.

Centralisation of signing authority and payments committee. In a crisis, loss of control over payments is lethal. The external CFO centralises the authorisation of all disbursements and creates a payments committee that classifies each obligation into three categories: critical (payroll, suppliers without whom production stops, Tax Authority and Social Security), strategic (key suppliers with room to negotiate) and deferrable (everything else). Every euro that goes out must be justified.

Mini-case. An industrial group in the agri-food sector, with EUR 45m in revenue and record orders, came to us with seven days of cash. The 13-week forecast revealed that the problem was not one of profitability, but a seasonal peak in raw-material purchasing financed entirely with overdue short-term facilities. The centralisation of payments and the prioritisation of critical suppliers avoided the shutdown of the packaging lines and bought the time needed for Phase II.

Phase II (Days 31-60): Working capital optimisation

With cash stabilised, the structural source of the problem is attacked: working capital. We work three levers simultaneously.

Lever A - Accelerating collections. Preparation of the aging list (age of client balances), design of a staged collection protocol, and, where appropriate, recourse to non-recourse factoring, which additionally removes the default risk from the balance sheet. The goal is to reduce the DSO in concrete, measurable days.

Lever B - Inventory optimisation. Application of the ABC method to distinguish the SKUs that really turn over from those that tie up cash, and moving towards Just-in-Time schemes with willing suppliers. Every day less of inventory is cash released.

Lever C - Controlled lengthening of payments. Negotiation of confirming (reverse factoring) with the banks (which gives liquidity to the supplier and term to the company) and instalment payment plans. The key word is controlled: lengthening payments without communication destroys trust; doing it through negotiation reinforces it.

Mini-case. A regional retail chain with 30 stores was dragging a CCC of 78 days due to excess stock from previous seasons. The combination of selective liquidation of the ABC “C” inventory, a collection protocol for its wholesale channel and the implementation of confirming with its three main suppliers reduced the CCC to 41 days in two months, releasing EUR 2.3m of trapped cash with no need for new debt.

Phase III (Days 61-90): Debt refinancing and restructuring

With cash stabilised and working capital optimised, the company reaches the bank negotiating table from a position of credibility. This is where the external CFO deploys the arsenal of debt restructuring and refinancing.

Independent Business Review (IBR) and viability plan. Banks no longer accept promises: they demand an Independent Business Review that validates, with independent rigour, the company's projections. The viability plan must demonstrate a sustainable projected DSCR:

DSCR = Free Operating Cash Flow / (Interest + Debt Principal Due)

Market standards place the minimum required DSCR in the region of 1.20x-1.25x, and it may be relaxed to 1.15x in favourable scenarios or tightened to 1.35x when perceived risk is high. A credible viability plan aims for a projected DSCR above 1.20x after restructuring.

Negotiation with the banking pool. With the CIRBE (the Banco de España's Central Credit Register) on the table, principal grace periods, conversion of short-term debt into long-term debt and, very often, covenant renegotiation are negotiated. The three most common financial covenants are the leverage ratio (Net Financial Debt / EBITDA, with typical limits of 3.0x-4.0x), the interest coverage ratio (EBITDA / Financial Expenses, usually above 2.5x) and the minimum cash or minimum liquidity.

The key, more than “pushing” the covenant level, is to negotiate the definitions (what goes into Net Debt, how EBITDA is adjusted), incorporate grace periods and equity cure clauses. Mastering this negotiation is an art: we explain it in detail in our analysis of how to negotiate financial covenants with the banks.

Alternative financing. When traditional banking falls short, direct lending comes in. Spain has become a relevant hub for private-debt funds: international firms such as Blackstone, KKR or Tikehau coexist with domestic players such as Oquendo, Alantra, Trea or Tresmares - the latter backed by Santander, with over EUR 2.4 billion committed to its main vehicle.

According to the consensus of experts consulted by elEconomista, “alternative financing accounts for between 15% and 18% of the total in Spain, without yet having reached the 20% threshold”, with tickets aimed at the small-mid market, i.e. companies with EBITDA of between EUR 3m and 15m. Added to this are solutions such as real estate sale & leaseback, which monetises idle assets without losing their use, and, for specific projects, project finance. Structuring the right financing is, frequently, the difference between survival and liquidation.

Mini-case. A scaling-stage technology company, profitable at EBITDA level but with an unsustainable debt service after a leveraged acquisition, presented a DSCR of 0.9x. The IBR and the viability plan convinced the banking pool to grant 18 months of principal grace and reconvert the short-term into long-term; in parallel, a direct-lending fund provided additional financing under the new structure. The projected DSCR settled at 1.28x and the company avoided pre-insolvency. (On the effects of leverage in situations like this, see our analysis of financial leverage: effect, benefits and risks.)

3. Fractional CFO vs. corporate Interim Management

There is some confusion between the two figures. They are not the same:

The cost of a fractional CFO usually moves in a range of EUR 3,000 to 10,000 per month depending on complexity, versus the total employer cost of a senior in-house financial director. The essential difference is philosophical: the interim replaces; the fractional CFO empowers. In a liquidity crisis, where the business family wants to solve the problem without losing the helm of their business, part-time financial management is usually the more proportionate option.

4. The human factor: managing uncertainty and governance

A liquidity crisis is also a crisis of trust and nerves. Three fronts demand particular attention.

Restoring bank credibility. Banks penalise bad, unexpected news far more than bad numbers. The contribution of an external CFO with technical dialogue and reliable forecasts transforms the relationship: from distrust to collaboration. The role of the CFO as a driver of growth and credibility begins precisely by recovering the word given.

Mitigating directors' liability. This is a critical and frequently ignored point. Article 367 of the Spanish Companies Act (LSC) makes directors jointly and severally liable for corporate debts arising after a cause for dissolution appears - typically, losses that leave net equity below half the share capital (art. 363.1.e LSC) - if they do not convene a general meeting within two months.

Article 5 of the Consolidated Text of the Insolvency Act (TRLC) additionally imposes the duty to file for insolvency once insolvency arises. And articles 225-236 LSC set out the general duty of diligence. The Supreme Court has reiterated this doctrine in numerous rulings (among others, STS 532/2021 of 14 July, and STS 1512/2023 of 31 October). Ignoring these deadlines does not only put the company at risk: it puts the personal assets of its directors at risk.

Aligning the management team. The external CFO often acts as a mediator between shareholders and as an anchor of calm for an overwhelmed management team. Internal transparency - communicating the plan, the milestones and the bad news in time - is as important as the external negotiation.

The good news is that the insolvency reform offers a legal refuge. The communication of the opening of negotiations under article 585 TRLC (the former “5 bis”) activates a protective shield: for three months - extendable - enforcement actions over necessary assets are suspended, the duty to file for insolvency and the cause of dissolution for losses (art. 613 TRLC) are stayed, and the negotiation of a restructuring plan (arts. 614 ff. TRLC) is protected. Its judicial confirmation (arts. 635 ff. TRLC), under the principle of minimum judicial intervention (art. 647.1 TRLC), allows dissenting creditors to be crammed down.

It is worth being realistic, however, about the use of this tool. According to Informa D&B, in 2024 there were 334 restructuring plans in Spain (2% fewer than in 2023) and in 2025 the figure fell to 276, 16% fewer, in both cases barely 4% of all insolvency proceedings. As Nathalie Gianese, head of studies at Informa D&B, sums up, “during 2025 the number of companies that initiated some form of insolvency proceeding grew by 6% to reach the highest figure in the last 10 years, 6,637”.

Trade and industry lead the use of restructuring plans. In other words: the mechanism exists and works - and case law has been shaping its contours; according to Cuatrecasas, “in 2025 we have seen a very significant increase in restructuring plans driven by creditors, with up to four cases: Urola Shipping, Grupo Rator, Inparsa and Wewi Mobile” (see, for example, Ruling no. 91/2025 of the Commercial Court no. 2 of Murcia, of 6 May, on Grupo Rator) - but it remains underused relative to the volume of insolvencies, in large part because companies arrive too late.

The range of restructuring options in the face of business crisis is wider today than ever; the key is to activate it in time.

5. Maraz's differentiation in Fractional CFO and Liquidity Crisis Management

The crisis advisory market is populated by three types of players. The Big Four and the large consultancies bring brand and muscle, but with high cost structures, rotating teams and response times that a liquidity crisis does not always allow. The interim management firms provide a full-time executive, but they replace management and raise the cost. The insolvency law firms dominate insolvency law, but their approach is legal-procedural, not financial-operational.

Maraz occupies a different space: a boutique corporate finance firm that combines the bank dialogue and execution of a senior CFO with the transactional vision of an investment banker. We do not replace management: we empower it. We do not hand over a report and leave: we execute the plan shoulder to shoulder with ownership. And when the situation requires it, we integrate the capabilities of business valuation and business plan, financial advisory in transactions (M&A) and economic-financial expert reports and forensic. We are not dismissive of the large firms - each has its space; simply, for a liquidity crisis in the middle market, surgical agility beats heavy machinery.

Conclusion on Fractional CFO & Liquidity Crisis

The underlying lesson is simple and counterintuitive: the health of a company is not measured in its income statement, but in its ability to generate cash. The more than 40,000 insolvencies in the first nine months of 2025 are for the most part not bad companies; they are companies that lost control of their treasury and arrived late. Poor accounting and treasury management is, frequently, the silent path from a good company to bankruptcy.

An external CFO specialised in special situations can stabilise cash in 90 days, rebuild bank credibility and give the company back the initiative - without the business family losing control of their business. The window for action is narrow, but real. The difference between restructuring and liquidating is usually a matter of weeks. If your company shows any of the signs described, let's talk as soon as possible.

Javier de Rojas Roca de Togores

Partner - Maraz Corporate Finance

FAQs on Fractional CFO & Liquidity Crisis Management

What is the difference between a controller and a fractional CFO?

The controller is a control and reporting function: they record, reconcile and prepare reports on what has already happened. Their view is fundamentally retrospective. A fractional CFO, by contrast, is a strategic and forward-looking figure: they design the financial policy, lead the relationship with banks and investors, structure the debt, manage working capital and take decisions about the future of the cash.

In a liquidity crisis, the controller will tell you what has happened; the fractional CFO will tell you what to do, will negotiate with the banks and will execute the plan. Both are complementary - the fractional CFO needs clean data that the controller or the bookkeeping firm must provide - but they operate on different planes of responsibility and added value.

How much does it cost to hire a fractional CFO?

In the Spanish market, an external financial management service is usually arranged through a monthly retainer ranging between EUR 2,000 and 8,000, depending on the dedication, the complexity of the business and the phase (a liquidity crisis or an active refinancing intensify the dedication). Against this, the total employer cost of a senior in-house CFO - salary, Social Security, bonus, recruitment cost - sits well above. The true metric is not the cost, but the return: avoiding a bad debt structure, releasing cash from working capital or saving the banking relationship is worth far more than the fee. You can analyse your specific case with us through our Fractional CFO service.

How do you build a viability plan that convinces the banks?

A credible viability plan starts from an honest diagnosis and is supported by validated projections, ideally through an Independent Business Review (IBR) that provides independent credibility. It must include the cash forecast, the action plan on working capital, the proposed new debt structure and - crucially - a sustainable projected DSCR, above 1.20x. Banks do not buy optimism: they buy testable assumptions, sensitivity analysis and a management team that demonstrates control over the cash. The difference between an accepted and a rejected plan usually lies in the rigour of the definitions and in the traceability of the figures.

Can the fractional CFO mediate in a conflict between shareholders?

Yes, and it is often one of their most valuable roles. In a crisis, tensions between shareholders - over who contributes capital, over strategy, over responsibilities - can block urgent decisions. The external CFO, by their independent position and technical language, acts as a neutral interlocutor: they translate emotions into numbers, present objective scenarios and help build consensus around data, not positions. When the conflict requires an objective valuation of the shares or the alternatives, we integrate our business valuation and business plan service to give the discussion an incontestable technical basis.

How long does it take a fractional CFO to come on board and start adding value?

The onboarding of a fractional CFO is one of their great advantages: between 3 and 5 days versus the weeks a transition manager requires or the months of a recruitment process for an in-house CFO. In a liquidity crisis, that speed is decisive. In the first week the 13-week cash forecast is already built and the payments committee is centralised; in the first 30 days, the cash is under control. This agility is precisely what differentiates external financial management from the heavy structures of the large firms.

When is there a legal obligation to file for insolvency and how does it relate to pre-insolvency?

Article 5 of the TRLC obliges the debtor to file for insolvency within two months of becoming aware of their current insolvency. Breaching that duty - or the duty of dissolution under art. 367 LSC - can lead to the personal and joint liability of the directors for corporate debts. That said, the insolvency reform offers a preventive route: the communication of the opening of negotiations under art. 585 TRLC suspends that duty for three months (extendable) and activates a protective shield to negotiate a restructuring plan (Law 16/2022 and the framework deriving from RDL 5/2023).

The key is to act before current insolvency, in the “probability of insolvency” phase. Knowing the warning signs for refinancing debt and the restructuring options available allows you to take the initiative instead of suffering the proceedings.