What if there was a way we could get help for our struggling business without having to talk to our accountant, bank manager or lawyers?
There is and you have found it! This site gives detailed information on the position your business is in, what your obligations and options are and what to do about it. We lay out the options, we give you free flowcharts and FAQs; we also lay out some of the advantages and disadvantages and discuss the options.
Our aim is business rescue
If a business is in need of saving then it may well be insolvent. Check to see if your business is insolvent by reading this page on the relevant test. Business rescue refers to strategic processes which can be taken on by businesses facing difficulty, in order to get them back on track – if and where possible. Professionals, such as turnaround consultants and insolvency practitioners can carry out and guide this process.
WE CAN HELP! Company Rescue offers a free consultation to all struggling businesses online and or on the phone, via our trained insolvency advisors.
With hundreds of pages of information you can access this resource and then follow anything up with a free of charge call too 0800 970 0539.
What are the main methods of rescuing a business?
Plan A or time to pay
If creditors are threatening legal action, it’s worth looking at what we call, Plan A. This is an informal deal with creditors as a way to pay back debt over a relatively short time period. We may be able to arrange a Time To Pay (TTP) deal with HMRC on your behalf if you've fallen behind on VAT and PAYE payments.
Company Voluntary Arrangement (CVA)
Similar to Plan A, a CVA is a formal deal made with creditors to ensure debt is repaid over a set time-frame. The arrangement protects your company from legal actions and is a powerful restructuring and refinancing tool. Unlike a Time To Pay deal, up to 60% of unsecured debt can be written off. For a detailed CVA guide, click here.
If the company is under threat from an aggressive creditor, selling the company in a pre-pack administration deal to a third party may be the best option. This ultimately gets rid of debt and allows the business to continue. It can end those sleepless nights quickly! Read our step-by-step guide here.
What about normal administration?
The principal aim of administration is rescue but it is also to get a better outcome than liquidation. Administration is more of a recovery from intensive care than a straight rescue as it is expensive, directors lose control and it is a very public event that tends to result in lots of job losses.
Sometimes a lender loses faith in a business's ability to pay back its debts and, as is its right, it can demand the whole loan is paid back in one go, instead of the monthly installments. If they are a secured creditor then they have the ability to call in the administrators to protect their position. This situation doesn't come out of the blue but it is possible that another lender sees the situation differently and so will be prepared to refinance by paying off the existing lender. Ask us about this, as we have lots of experience with lenders who are prepared to look at more distressed businesses. Interest rates are likely to be high to reflect the risk but at least it can give the business a breathing space.
What if the rescue fails?
If the business can't be rescued then the only option is liquidation. However, it should be borne in mind that really we are talking about a company carrying out a business that needs to be rescued. It is possible that the company ( the legal entity carrying out the business ) can no longer exist in its current form as it has accrued debts but that the business can be saved. This is what happens in a phoenix company and a pre pack administration. Both are complex processes and it is essential to get legal advice on the implications.
Common questions we get include:
- What is a company voluntary arrangement or CVA?
- How does a company get wound up?
- Should I liquidate my struggling company?
- What is the difference between bankruptcy and an IVA?
- How does pre pack administration work?
- Who pays for redundancies if we have no cash?
- What is wrongful trading?
- What is an overdrawn directors current account?
- Will I lose my home?
These are popular questions amongst hundreds of others that my marvellous team can answer in English not gobbledygook, along with examples of how to deal with these problems. These guys really care about your enquiry and will not just give you platitudes. If they cannot answer straight away, they'll get answers internally or from our lawyers or insolvency practitioners and call you right back.
For many technical problems our team will pass the enquiry on to Keith Steven (me) or Iain Campbell. Personally I have dealt with thousands of enquiries over the years but every day we get a situation that we think, "wow, that's an interesting one"!
That's why I love this business! It's always challenging you with new problems and new scenarios and we love sorting those out for people!
We handle hundreds of enquiries every month. SO what can we do for you, your business or your client's business?
Got a problem or unanswered questions? Why not give us a try, we are friendly, blunt and accurate in our answers - call us on 08009700539.
Categories: What is a CVA or Company voluntary arrangement?
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 includes updates due to Covid-19 For instance 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.