When a business gets into trouble it can be tempting to ignore the situation and hope that it will all go away.
The good news though is that it doesn’t have to be the end.
If your company is deemed insolvent then it’s a legal requirement for you to cease trading. Insolvency however, doesn’t have to spell the end for a business once and for all. If the right steps are taken and honest, helpful advice from a liquidation professional is found, there’s a chance your business may be snatched back from the jaws of complete dissolution.
In fact the earlier that advice is sought, the more options will be available to you.
How do you know when it’s time to seek insolvency advice?
There are some tell tale signs to look out for when assessing whether or not your business is approaching insolvency. A severe lack of cash flow will be one of the most prominent signs. If your business is struggling to pay every day operational costs, has received statutory demand or County Court Summonses and creditors are pressing for payment, then insolvency may be on the horizon.
Insolvency can be self-initiated or compulsory, in the form of a winding up petition from creditors.
If some of this sounds familiar then it is probably a good time to seek out expert insolvency advice from someone who knows how to handle such things. If you receive a winding up petition then you may need to act extremely quickly to avoid going out of business, particularly if the petition is advertised or becomes public knowledge. Insolvency, liquidation or administration are naturally very difficult things for any business owner to accept, but with the right help and advice they don’t have to be such a headache – and they certainly don’t always mean the end of the road for a business.
Bouncing back from insolvency
Declaring your business insolvent or receiving a winding up petition does not necessarily mean the end for you. There are many things you can do to get things back on track, as any company or individual offering insolvency advice will tell you. Informal creditors arrangements can be set in place before the process becomes official – many creditors will be happy to negotiate repayment terms with you based on your situation if you approach them in the right way. If this point has already passed, then a Company Voluntary Arrangement (CVA) can be applied for and, if approved, will allow monthly settlements which will spread out your debt and make it easier to manage. Administration can lead to a complete turnaround of a business if handled by a liquidation professional, and will allow the business to keep trading while legal action is halted.
Whatever you decide to do, and whatever situation your business finds itself in, it is imperative that you seek out professional and helpful advice to give your business the best chance of survival. Remember though, a business failing should not be regarded as a personal failure, and there is always more opportunity out there.