"What if there was a way I could save the business, get rid of some costs and or staff, rebuild our sales and profits without closing it? I don't want to see all of our hard work destroyed and have the misery of going bankrupt!"
There is a great potential solution for your problem and you have found it...An IVA!
Individual Voluntary Arrangements - A Simple Guide
An IVA is a powerful insolvency tool that will ringfence your creditors (that's all your business and personal debts but not a mortgage) and take away the pressure.
It is a deal between the insolvent sole trader and its creditors; this legally binding contract allows you to repay some or all of the historic debts from future profits over a period of time. Debtors (you) stay in control and it stops any legal actions if you use a quality advisor. It has been in UK law since 1986 and is one of the Government's preferred rescue options.
Isn't that better than going bust, closing down and every creditor losing their money and an ongoing customer?
IVAs are amazing for rescuing a distressed business when you know it can be profitable in future. You can make employees redundant with no cash cost, get out of property leases and problem contracts and make the business profitable again with the IVA and our help!
In the time it takes us to organise the IVA for you, we will freeze your payments to VAT, PAYE and creditors. Then together we offer the creditors a deal over time to pay something back from future profits. This improves the cashflow in your business.
We are often asked if its so great why doesn't everyone use the IVA if their business gets into trouble? The answer is because very few people know about this fantastic tool and most sole traders with problems end up going bust because they are scared of insolvency.
What are the downsides? A fee is payable and your credit rating will be affected for up to 6 years after the IVA. You may have to give your share of the equity in your home to the creditors as part of the deal. All of this is much better than bankruptcy by the way!
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.