If your business is in difficulty then you may need to consider business recovery services. Not all Insolvency Practitioners want to bury a company and extract the maximum amount of fees doing so! In fact the main purpose of administration, as an insolvency tool, is to rescue the company as a going concern.
Business recovery may not even always require a formal insolvency process. Businesses face difficulties for all sorts of reasons; a fall in sales, rise in costs, difficulty obtaining finance, and/or legal action dragging the company down. In some instances the term is even used for recovery after a major disruptive event like a fire or flood. In any event, we know a lot of people that can help businesses get out of a rut.
Financing Problems. If the bank or factor is making life difficult we know organisations that are more open minded and flexible in their finance products and can replace the funding.
Financial Management Issues. We have a number of businesses that we work with that can help businesses manage their finances and mitigate financial difficulties. This is often done by outsourcing some of the finance function or bringing in a part time Financial Director.
Marketing and Sales Improvements. Marketing is often done on a project by project basis so it can make sense to bring in a part time Marketing Director as well.
Of course the above situations are not solutions to where the situation is especially difficult, such as where a creditor is threatening legal action to recover a debt. In these instances a full, more in-depth business recovery plan is needed.
If the business is viable but one particular debt is dragging on the company then there may be two approaches:
- Plan A approach: a formal or informal deal with the creditors that allows the whole debt to be paid off over a year or two.
- Plan B approach: using a company voluntary arrangement.
Obviously a CVA has more power to cuts costs than an informal arrangement including the fact that a substantial part of the unsecured debt can be written off. However, an informal arrangement might stick as the threat of a more formal insolvency process might focus minds.
In certain circumstances a pre pack administration may be the way to rescue a business where the ability to trade is severely curtailed.
In the event of a CVA our business recovery services extend to supporting the businesses through the process. This is done by regular reviews of the companies progress and help with techniques to maximize cashflow.
What is the cost of your business rescue service ?
All our fees are agreed in advance, and in writing and they can normally be met from the savings to the cashflow that our advice brings. Obviously, it depends on the amount of work required so we cannot indicate a figure on this web page. Initial advice is free and we hold a free meeting with directors followed up by a solutions report (also free).
Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.