In an ideal world, no business owner should end up in a position where a business fails due to debt problems. Sadly, many business owners suffer this consequence every year.
Many of those businesses could have been saved if they had sought advice on the available company rescue strategies before insolvent proceedings commenced. There are several ways to rescue a company and with the right advice taken at the right time, a business can be saved and its fortunes restored.
There will of course be some cases where a business is no longer viable or sustainable, however each case is different and an expert advisor should be approached to find out if a business can be rescued.
Ways that a company can be rescued include:
- Help with cash flow problems including possible sources of finance
- Implementing a management turnaround programme to restore a company to profitability
Typical options for company rescue include:
Company Voluntary Arrangements (CVA)
A CVA is an arrangement between an insolvent company and its creditors which allows the company to pay off its creditors over a specified period. This is suitable for companies able to demonstrate that creditors can be paid from future trading. This will also suit creditors who will be happy that measures are being taken to pay what is owed rather than having to write debts off.
Company turnaround is a process designed to halt a decline in a company’s profitability and/or its ability to trade. This may involve refinancing the business, renegotiating terms with creditors or suppliers, renegotiating terms with customers and addressing unnecessary overheads.