Are you struggling with debts & cash flow?
Cash flow problems can be an early warning sign of impending company insolvency. When cash flow becomes squeezed, the situation can quickly escalate, leaving the company unable to pay its liabilities and overheads as and when they fall due. When this happens, the company can be said to be ‘cash flow insolvent’ and swift action needs to be taken.
Cash flow problems can be defined simply; it’s when debt payments outweigh the money coming in.
A firm is insolvent when it becomes unable to meet its financial liabilities and, though this is not necessarily the same as having cash flow problems, there is usually a close connection between the two.
Business cash flow problems open the door for a number of other issues which can lead to formal insolvency proceedings unless you seek help from professional insolvency specialists at the earliest opportunity. You’ll need to be honest with yourself and face up to the figures in front of you. It may be just a temporary problem that can easily be resolved, or maybe you’ve been in denial and there are serious underlying issues which will take radical steps to rescue your business.
Once a company begins experiencing cash flow problems the biggest worry for directors is being faced with a winding up petition by creditors. This means your company may potentially be a matter of days from liquidation.
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Pressure from HM Revenue & Customs
Every company that is facing financial distress will have HMRC Revenue debt issues. We are highly experienced in working with our clients to resolve and ease the pressure from HM Revenue and Customs.
Whether it involves trying to secure finance to repay, agreeing to formal arrangements such as a Time to Pay Arrangement with HMRC or discussing other options available to you, we can save your business together.
Bounce Back Loan Repayments
The effects of the COVID-19 Pandemic continue to affect businesses and none more than having to try and find additional monthly cash to repay a Bounce Back Loan or CCCS. This can have a drastic effect on cash flow.
Once you combine your Bounce Back Loan repayments with HMRC or other credit pressure, you may need to consider urgent action to carry on trading. We can help with this.
Threats from Creditors
Any company in distress will face increasing pressure from its creditors. Whether they be suppliers, HMRC or banks (BBLs/CBILs). We can help ease this pressure.
We are highly experienced in agreeing repayment plans and, in particular, fighting off statutory demands and/or winding up petitions. We can help you ‘buy time’ to put a restructuring plan in place.
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Statutory Demands & Winding Up Petitions
A statutory demand is essentially a formal written demand for payment from a creditor. They can be used to apply pressure on an individual or company to pay a debt. A statutory demand should only be used in relation to undisputed debts. Serving a statutory demand will likely be the first step taken by a creditor who intends to petition for a debtor to be declared bankrupt or wound up.
If a company receives a winding-up petition, its bank accounts will be frozen as soon as the bank becomes aware and additional creditors will be able to attach to the original petition.
We can help with drafting, serving and successfully defending statutory demands and winding-up petitions.
Debt Recovery
Often businesses find themselves in financial difficulties due to difficulties in recovering outstanding payments owed by clients and customers.
Being able to secure payment of these debts as early as possible can often significantly improve your cash flow situation. An improved cash flow can help rescue your business and cover your own debts. There are also re-financing options we can look at with your debtor book, including invoice discounting and factoring.