Are you concerned about your company’s financial future? Whether you’ve discovered that your company is insolvent or you’re worried about slowing, unpredictable cash flow, you may benefit from speaking to an insolvency practitioner.
An insolvency practitioner is a licensed and qualified expert that can take action regarding your company’s financial affairs. If your company is insolvent (or soon to be insolvent) an IP works to put it on the path towards recovery while maximising the interests of its creditors.
Our experienced team of licensed insolvency practitioners have helped hundreds of UK-based businesses recover from serious financial issues. If you’re concerned about your business, we are also here to help you.
How can insolvency practitioners help your business?
When your business is in financial trouble, insolvency practitioners can take action to put it back on the right financial path. An IP can achieve this by negotiating with creditors, using a solution such as administration or raising additional financial via a loan or cash flow solution.
Unfortunately, not all businesses can recover from insolvency. If your company has significant debts and such poor cash flow that financial recovery isn’t realistically possible, the IP may opt to enter the company into voluntary liquidation in order to raise cash for its creditors.
Insolvency practitioners have several tools at their disposal for facilitating a recovery. Some of the most common outcomes of working with insolvency practitioners are listed below:
- If your company has reasonable cash flow and can potentially become viable again if its debts are renegotiated, the insolvency practitioners can propose a Company Voluntary Arrangement, giving your company more time to pay off its debts.
- If your company needs to be restructured in order to successfully manage its financial affairs and begin recovering, the insolvency practitioners can use administration to implement necessary changes while being protected from creditor legal action.
- If your company is potentially viable but simply needs help accessing more cash, the insolvency practitioners may be able to improve cash flow through invoice discounting, factoring and other emergency finance solutions.
- If your company has valuable assets that you would like to preserve, the insolvency practitioners may recommend pre-pack administration — an insolvency procedure that preserves certain business assets through a pre-packaged sale.
- If your company is in serious financial distress and simply can’t recover, the insolvency practitioners can enter the company into liquidation voluntarily, reducing the risk of the company directors facing wrongful trading charges.
Insolvency practitioners work to facilitate a recovery for your company, but primarily to ensure that creditor interests are maximised. There’s no one-size-fits-all solution for each company — IPs look at a variety of factors to work out which course of action will lead to the best results.
Choosing a licensed, qualified and experienced insolvency practitioner
In the UK, insolvency practitioners must be licensed. Before choosing an insolvency practitioner for your business, make sure they have passed the JIEB exams and are licensed through one of the UK’s recognised professional accounting bodies.
It’s also important to ask your insolvency practitioner if they have specific experience assisting businesses with similar problems to those that yours faces. Our experienced, licensed IPs have provided expert help to hundreds of companies, both small and large, throughout the UK.
Should you speak to an insolvency practitioner about your business?
Are you concerned that your business is insolvent? Whether you’re certain that your company is insolvent or simply worried about future cash flow issues, you should contact an IP as soon as you realise there is something wrong.
The earlier you contact an insolvency practitioner, the more likely it is that they can implement a solution to prevent your company from being liquidated. Failing to take action when you realise that your business is insolvent can also result in penalties under the Insolvency Act 1986.
Do you have concerns about your company? Below, we’ve listed several common warning signs that your company is in financial distress. If your company meets one or more criteria below, it’s important that you seek advice and assistance from an insolvency practitioner:
- Your company can’t afford to pay its creditors on time and frequently stretches its cash flow to the limit in order to pay its bills. Creditors often complain about non-payment or issue demand letters to your business for unpaid and overdue debts.
- Your company is completely out of cash and can’t pay its creditors, including employees and suppliers. When your company is unable to pay its debts as they are due, it’s highly likely that it’s cash flow insolvent.
- The total amount of your company’s debts exceed the value of its assets. This is a form of insolvency called “balance sheet insolvency”. When your company is balance sheet insolvent, it needs to take action and cease trading immediately.
- Your company has taken on too much debt that it is struggling to service. Companies that are very over leveraged are at the highest risk of becoming insolvent, particularly when cash flow is disrupted or sales decrease.
Whether your company has one or several of the problems listed above, speaking to an expert insolvency practitioner is a good idea. The earlier you act, the more likely it is that your company can recover with the assistance of an insolvency practitioner.
Get confidential advice from our expert insolvency practitioners
Is your company struggling to stay afloat? If your company is experiencing a slowdown in cash flow, has significant financial issues, or you’ve received a demand letter from a creditor, we’re here to help.
Our experienced insolvency practitioners have helped hundreds of UK businesses deal with legal pressure from their creditors, cash flow issues, balance sheet insolvency and numerous other serious financial problems.
No matter how dire your company’s financial situation may seem, there are options available to help it recover. An insolvency practitioner can negotiate with creditors to reach an arrangement regarding debts, as well as use procedures such as administration to save your business.
We take a case by case approach to insolvency and recovery. When you work with our team of insolvency practitioners, we examine your company’s finance and trading history to determine the most effective path forward.
Contact us to speak to an insolvency practitioner and learn more about the options available to your company. We can provide the expert advice and assistance to ensure your company can recover from its financial issues and make a full return to successful trading.