How do you deal with Company Debts?

Handing company debt and its cash flow are crucial part of the management of your business. If you cannot meet the monthly payments then annual profit and the value of the business can be meaningless. Poor debt and cashflow management can ultimately destroy a viable business and even lead to liquidation.

There are many types of credit payments you may need to make each month from suppliers to your bank and even investors. The key to a healthy successful business involves efficient debt management.

If, despite your best efforts and debt management, business begins to experience company debt problems, you must not panic nor should you bury your head in the sand. These actions will not help, and the problems will not go away.

As with most things in life, recognising the problem and taking early decisive action will likely stop a bad problem getting worse. Gather information, take advice, and make proactive and informed decisions about how best to achieve a resolution.

What information should you gather? Firstly, look at the cash flow — past, present, and projections for the future. This simple task may show you where the issue, and solution, lie.

If, having taken stock of your cash flow assets and liabilities, you can not see a solution you should take the advise of an experienced business recovery specialist. This would usually be a licensed insolvency practitioner.

Together you will go through the company’s position, discuss your options and come up with a plan to address the difficulties.

The options that you may go through may include: 

  • Negotiation or restructuring of company debts,
  • Obtaining finance
  • Company Voluntary Arrangement — this will allow you to continue trading whist restructuring the debt over a period of time, giving the business breathing space.
  • Administration — a restructuring option that may limit liability for debts while selling the business and assets to a new owner, which could be the previous owners.
  • Voluntary liquidation — in some cases the best solutions option for settlement of may be to liquidate the company and all its assets, allowing the directors to move on. 
    There are therefore, many options available to deal with company debts, but the earlier you take steps the more chance there is that a viable business can be saved. Do not ignore the signs or creditor pressure.
    If you are feeling the pressure of company debts call us today for a friendly, confidential no obligation chat with one of our experienced team

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