There are many aspects which will determine whether a business facing financial difficulty can be saved. This can depend on both the specific issues faced and the speed in which these are addressed by the management and directors.
The overriding question is whether it is possible for the business to be saved in the first place. Are the trading projections realistic and achievable? How can the required level of savings be made? Will the support of lenders and creditors be forthcoming?
In order to answer these questions a recovery plan is required that is acceptable not only to directors, but shareholders, creditors and lenders where applicable.
Business recovery options might include:
This is when the directors are confident that the company will be in a position to successfully trade through its financial difficulties with uplift in profitability and/or its ability to trade.
Company Voluntary Arrangement
A CVA is an arrangement over a specified period agreed by creditors and subject to specific agreements which the company must adhere to during the course of the arrangement.
Having a CVA approved enables the company to continue to trade in most instances securing both on-going contracts and employees.
Pre–pack Administration occurswhen a proposed administrator negotiates the sale of assets prior to the company entering administration which is concluded immediately on his appointment.
This can ensure elements of the business are preserved and it continues to trade.
Business recovery is possible if the correct course of action to resolve company debt problems is implemented in time.
An experienced advisor can help you with the right solution for your company.