How to negotiate with banks, funds and suppliers in Brazil

01

Map who owns the claim, who controls cash and who can sign

Build the debt schedule by instrument and borrower, rather than by banking brand. Start with executed contracts, assignments, account-control notices, collateral records and guarantees. Put the lender’s balance next to the company ledger, then reconcile principal, accrued interest, fees, currency, maturity and the date of the calculation. Map which entity owns the cash or collateral and which entity owes the debt. A guarantee can put an affiliate or a founder in a different negotiation from the operating company.

For each conversation identify the claim holder, contact, decision-maker and signatory. The relationship manager can be the right entry point, while a recovery team, credit committee or other delegated authority may own a waiver. Ask who will write the credit paper, which decisions can be made together, and when the approval can actually be sought. On receivables, confirm who can instruct the paying customer and which account is legally entitled to receive funds.

• Record the legal holder and borrower, executed instruments, any assignment and a reconciled balance as of a named date.
• Mark each payment route, cash sweep, guarantee, cross-default and security interest that changes a practical alternative.
• Record the mandate and approval stage for a waiver, standstill, compromise, collateral release or new money separately.

02

Give the bank a recovery comparison it can defend

A workout or special situations team can have a rational reason to extend, settle, sell or enforce: maximize the expected recovery after the costs, timing and risks of each route. The alternative might be an enforceable guarantee, a receivables sweep, a sale of the exposure or a lower recovery after the business stops. Model those alternatives creditor by creditor. Estimate net collateral proceeds after prior rights, realization costs and the time to receive cash. Value a guarantor separately; two creditors may be counting on the same assets.

Show the proposal on the same basis: money at signing, realistic instalments, any new money, enforceable protections, expected cost and the result if a milestone fails. Give credit for a promise only when there is evidence of funding. Forecast liquidity through the first missed payment, the approval window and the first instalment. A committee can prefer a smaller, earlier and better supported recovery to a higher headline promise with no credible funding source.

For support translating a recovery comparison into a creditor proposal, Rodrigo Gallegos ↗ (opens in a new tab), a founding partner at Ritus Partners (PreservaCred’s restructuring partner), works with management on restructuring terms and creditor negotiations.

03

Keep the bank’s provision, write-off and tax treatment separate

When a lender mentions PDD (provisão para devedores duvidosos, an allowance for doubtful debts), ask which number it means: the allowance against the asset, the current period’s expected loss expense, or a different management measure. Under CMN Resolution 4,966, the general model starts with expected losses associated with defaults possible in the next 12 months, switches to a lifetime horizon after a significant increase in credit risk, and includes a third stage for assets with credit recovery problems. Expected recovery from collateral, enforceability, timing, borrower condition and applicable regulatory floors all matter. BCB Resolution 352 specifies implementing procedures, including minimum provisions in defined situations.

The CMN rule lists a request for RJ or RE among the indicators of a credit recovery problem. Significant concessions prompted by deteriorating credit can also constitute an accounting restructuring in a private deal. Neither route carries a universal allowance percentage. BCB Resolution 352 has a separate rule for corporate bankruptcy. From the bankruptcy order, covered institutions must provision the incurred credit loss at 100% of the asset’s gross carrying amount. CMN Resolution 4,966 also prescribes a 100% allowance in specified cases where a previously written-off asset is recognized again. It permits a lower allowance after significant repayment or when new, documented evidence shows a material improvement in the ability to pay. Ask which event and measurement rule apply to the instrument. A write-off is an accounting event; by itself it does not release the borrower or guarantor. Itaú’s third-quarter 2026 BRGAAP management report illustrates the distinction by presenting expected loss expense, recoveries on written-off loans and discounts granted on separate lines.

Tax has a separate timetable. Law 14,467 governs when covered financial institutions can deduct eligible incurred credit losses for corporate income tax (IRPJ) and the social contribution on net profit (CSLL). For ordinary delinquency, the law applies statutory factors and time overdue once principal or charges are more than 90 days late. For a corporate debtor granted RJ, Article 2 separately addresses the amount above what the debtor has committed to pay. Article 4 brings a recovery of amounts previously deducted into the relevant tax bases. A larger accounting allowance does not establish a matching tax deduction. For a proposal, have the institution assess its prior deductions, applicable regime and transition rules, timing and net cash recovery.

Sources for this section: CMN Resolution 4,966, Articles 2–3 and 37–51: instruments, staging and expected credit loss · BCB accounting manual: minimum provisions and corporate bankruptcy under Resolution 352 · BCB Normative Instruction 643: clarification on accounting restructuring · Itaú Unibanco, third-quarter 2026 BRGAAP management report: cost of credit · Law 14,467/2022, Articles 2–7: eligible credit losses and tax treatment

04

Find the mandate behind a fund or FIDC

For a FIDC, a Brazilian receivables investment fund, start with the fund and class named in the assignment or credit documents. The manager, fiduciary administrator, servicing agent and authorized signatory can play different roles. Ask which parties need to approve a maturity extension, claim sale, discount or release of an account. Verify the authority in the governing documents and approval record. CVM Resolution 175 and Annex II provide the regulatory framework; the fund documents tell you how a particular class can act within it.

Ask what the proposed terms do to cash distributions, maturity, concentration limits, valuation and any investor or financing covenants. A discounted purchase price alone tells you little about what a fund will accept. A long extension can be unattractive if the vehicle needs to return capital earlier. Where a fund holds both a direct claim and purchased customer receivables, the assignment and payment instructions can matter as much as the face balance.

Sources for this section: CVM Resolution 175, general provisions and Annex II on FIDCs · CVM Resolution 240/2026, amendment to FIDC Annex II

05

Negotiate old invoices and future supply on separate tracks

A supplier may have payroll, inventory finance and an insurer to answer to. The question may be whether it can afford to make the next delivery. Put the historical balance in one schedule and the future purchase arrangement in another. Identify the minimum volume needed to keep operating, the cash source, delivery dates, price and whether new shipments require prepayment, cash on delivery, credit insurance or agreed limits.

Check substitutes for lead time, customer approval, equipment compatibility and local capacity before using them as negotiation leverage. Put disputed invoices, quality offsets and returns on a separate reconciliation track. Have local counsel review any selective payment, offset or new security against the applicable agreement, law and court orders. A commitment for fresh supply should specify what happens if the next payment fails and who can pause an order.

06

Choose the scope of the deal before negotiating its price

A private amendment binds the parties that sign it; work out what other lenders, guarantors and suppliers can do while it is negotiated and after it takes effect. A statutory recuperação extrajudicial (RE) is negotiated outside court and submitted for court approval. Article 162 addresses a plan with signatories; Article 163 can bind other eligible creditors within its scope once approved by the court, subject to more than half of the claims by value in each covered species signing and the other statutory conditions. Article 163 §7 permits filing with at least one third by value in each covered species and requires the final threshold within 90 days of filing. Section 8 limits the conditional stay to covered species. Test the pool, exclusions and denominator before counting signatures, and confirm the operative court order before relying on any stay.

In recuperação judicial (RJ), the court-supervised proceeding introduces a formal creditor list, judicial administrator, notice and, where applicable, voting by statutory classes. Under Article 45, Classes II and III have both value and headcount tests among those present; Classes I and IV have a headcount test. Article 58 provides a separate route to grant relief in specified circumstances. Check what the operative order actually stays, the treatment of collateral and which claims are outside the plan. Creditors generally retain rights against co-obligors and guarantors under Article 49 §1; test releases, votes and relevant orders separately. Negotiation leverage comes from viable alternatives, coverage and funding rather than the name of the procedure.

Sources for this section: Law 11,101/2005, Articles 6, 39–45, 49, 58 and 161–165: voting, coverage and court approval · STJ Súmula 581: proceedings against guarantors and co-obligors

07

Agree who speaks for the company and protect decision capacity

An owner who has guaranteed debt may face a different set of consequences from the operating company. Disclose conflicts internally, agree when the owner speaks for the company, and involve separate advice where needed. Give executives and their alternates written authority for the tasks they can perform. High-pressure negotiations can leave one person answering every call while payroll, suppliers and the court calendar also need decisions. Hold shorter meetings, keep a decision record and confirm major commitments through a second reviewer.

Agree the working language, the controlling signed version and who reviews terms in Portuguese. Write out monetary units, date formats and the time zone on deadlines. After substantive calls, circulate a short record of the proposal, authority still needed and evidence requested. In a live case, route formal steps to the judicial administrator or court when required and retain the file reference. Treat discussion, committee approval, signature, a recorded vote and an operative order as distinct milestones.

08

Leave the meeting with an approval path and a fallback

Make the decision request small enough to answer: the exact scope and expiry of a standstill, the condition for releasing cash, or the terms of an amendment. Identify what is due while the request is pending, who will approve an extension and which deadline would trigger a different plan. A financing condition that cannot clear before the next payroll needs a funded bridge or a revised timeline.

• Send a one-page proposal plus the supporting cash forecast, debt reconciliation and collateral schedule through the agreed channel.
• Log the owner, approver and date for each decision. Where signatures or court approval matter, obtain and retain the effective instrument or order.
• Keep a documented downside plan for a missed vote, a delayed committee or a supplier that cannot continue shipping.