Having your company become insolvent is, unfortunately, becoming all the more common. Since the recession, more and more businesses have become insolvent, and the warning signs now need to be spotted as early as possible to stand any chance of survival. Company insolvency doesn’t have to be the end of the road, but it is important that you accept things, take the required steps and get ahead of the game. Your road through company insolvency to business success could be shorter than you think if you get the right people involved and take advice from liquidation professionals. This advice could prove invaluable to your chances of survival, and could turn a negative process into a huge springboard for future success. Company insolvency is not the end.
How has the recession affected the rate of company insolvency?
The number of businesses being rendered insolvent has grown exponentially over the past 5 years, not least because of the effects of the recession. This ‘credit crunch’ has led to many lenders restricting or limiting their funding to business. This, combined with a fall in consumer demand and confidence, has created an extremely difficult environment for businesses to flourish in.
What are the warning signs of insolvency?
The earlier you catch the road to insolvency, the easier your business will be to rescue. It’s vital that you seek professional liquidation advice to fully assess your current situation and the potential options that you may have. There may be a few different routes you can take through insolvency – if it comes to that at all. But how do you know when to get help?
There are really two main signs of a company approaching insolvency or liquidation. The first telling sign is an inability to settle debts with creditors before their due dates. The second, perhaps more telling factor, is when the liabilities of the business are worth more in base value than the assets. Once you’re at this stage then insolvency becomes a real potential threat, but handle it correctly and could become an ally. While these signs might not seem to threaten the survival of your business directly, they have knock on effects which almost inevitably follow. If you can’t settle with creditors, then they’re likely to halt their funding and may even file a request for your company to wind up in order to pay its debts. HMRC debt will naturally have severe consequences which may find your struggling without professional insolvency help.
As a business owner, if you spot any of these signs then take action. Earlier action will result in more options being open to you. A turnaround specialist could could rescue the business, or any liquidation professional could advise you on the best routes to take through insolvency to make sure that you come out on top and ready to fight another day.