Despite the best efforts of all involved, many companies will at some point, experience financially challenges. This does not necessarily mean the business is doomed to fail, in fact for many, this will be nothing more than a temporary dip in performance; however, for some, the problems will require a level of intervention in order to get the company back on its feet.
Seeking professional advice from a company debt expert as soon as you notice your business is struggling, could be the difference between your company being able to turn its situation around, or falling into a state of terminal decline.
When it comes to running a successful business, ensuring a healthy cash flow is in place in vital. Cash flow not only allows your company to pay its wages, bills, and other outgoings as and when they fall due, but it also acts as a barometer as to the financial health of your business. Once you begin to experience cash flow problems, you should take this as a sign that you could be heading towards a financially precarious position.
Again, squeezed cash flow does not necessarily mean the business is bad. The important thing is to get to the root cause of your worsening financial position and see what changes can be made to improve the situation. In some cases, there may be external factors at play which are dampening sales, perhaps your sales margins have decreased due to rising costs elsewhere, or maybe your debt repayments have escalated and you need to look at refinancing options to bring this down to a more sustainable level.
By taking swift advice from a licensed insolvency practitioner at the early signs of business distress, you can understand all of the options which are out there for you and your company, and work towards an appropriate solution. This may involve negotiations with creditors, refinancing, or a more comprehensive restructuring of the company and its operations.
Regardless of the size of your company, or the sector you are operating in, if you are struggling with business debts – whether these are in the form of loans, credit agreements, lease or rent arrears, or payments to suppliers – you need to take action to remedy the situation. Left alone, business debts only get worse as the situation escalates, the amount owed increases, and creditor patience wears thin. In the worst-case scenario, you could be forced into compulsory liquidation by a creditor should they issue a winding up petition against your company for non-payment of debts.
Taking the first step towards resolving company debt issues and asking for advice from a professional such as a licensed insolvency practitioner, is undoubtedly tough, however this can be absolutely vital in turning around your company’s financial position. This is because there are a range of formal and informal solutions available which can help ease a business’s debt problems and put them on the road to recovery.
Depending on the scale of your company’s debt, the ability to repay this money, and also the desire on behalf of shareholders and directors to continue trading, there are several options which can be considered.
Once you begin discussions with a licensed insolvency practitioner, they will be able to clarify your position, assess your business’s likely future viability, and suggest the most appropriate option for you and your company. For some businesses this may involve informal negotiations with creditors, arranging a Time to Pay (TTP) agreement with HMRC, or easing short-term cash flow worries by accessing third-party funding. However, in some cases, a more formal route will need to be taken:
If your company is struggling with mounting business debt and you would like to understand your option, call the experts at UK Liquidators. You can arrange a free no-obligation consultation with a licensed insolvency practitioner who will be able to help you understand your options for either saving or closing down your indebted business.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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