The Government has put in a huge amount of support for businesses, which you can read about in this blog post Government help for businesses struggling with Coronavirus (COVID-19)
However, if you think that none of the Government support packages will work, you’ve tried to put them in place with no luck, or you just want to look at alternative solutions then the following may be more useful.
Please note, and in the interest of total transparency, we provide all the services below and we would urge you to investigate the Government support first. Some of the services below are designed for businesses that are in financial distress and may not apply to everyone.
If you do decide to contact us we’ll always give you the initial advice completely free of charge, we’ll listen to your circumstances and then give you no obligation advice and a plan of action, you can then decide if you want to carry out the plan yourself or with us. Where possible we will look at deferring fees or spreading them over a longer period.
Business rescue options
For businesses that want to keep going.
Other types of funding and finance
Business funding can come in many different shapes and sizes, from standard loans through to invoice and asset financing. The right type for you business will depend on a range of factors which includes how much needs to be borrowed, how much the business can afford to pay back every month, and how the money will be used.
If the funding is needed for the purchase of a new piece of equipment of machinery then asset finance may be the most suitable type for you. If the funding is needed to plug a cash flow hole because customers haven’t paid their invoices on time then invoice finance may be the best product for you.
By looking at the whole market than just the options offered by the CBILS you may be able to find a more suitable product which meets your funding needs.
Company voluntary arrangement
Essentially a Company voluntary arrangement is a debt consolidation plan where not all the debt is repaid to its creditors, and the amount agreed is paid off in monthly instalments. This means a business can carry on trading whilst the plan is in place. It is worth pointing out that a CVA is a legally binding contract between your business and its creditors allowing you to repay part of the debts owed over time.
Your business can repay between 20% and 100% of its debt, depending on the arrangement, and a CVA usually lasts between 6 months and 1 year. CVAs can be the perfect solution some companies who are struggling with debt, but not all will be able to benefit.
Find out more about Company Voluntary Arrangements
Administration
This is where an administrator (an insolvency practitioner) is called in to manage a company that is in financial trouble. They will usually look to see whether the company can continue trading or be sold so that new owners can turn the company around. If it can’t be sold then the company will be closed down and the assets sold to cover its financial responsibilities.
Administration is one of the options open to insolvent businesses. It allows the reorganisation of an insolvent company, whilst protecting it from its creditors. As Administrators, we can hold a company together whilst plans are formulated to rescue the business, maximise asset realisations or put forward alternative options.
Administration can be initiated by directors and used very effectively as a restructuring mechanism. Where the company has a viable future it provides a breathing space in which proposals can be put to the creditors.
Streamlined under the Enterprise Act 2002, we can restructure a business quickly and efficiently. The company can subsequently exit Administration via a new legal entity.
Find out more about Administration
Pre-pack administration or company restart
A pre-pack administration sale is a process that involves selling company assets as the company enters into administration. Pre-pack administration lets an insolvent company’s directors resume the business while repaying the company’s creditors.
There are several advantages to pre-pack administration. Creditors benefit from the sale of company assets immediately upon entering administration, while directors benefit from the ability to create continuity for some aspects of the business.
Employees and suppliers of the business also benefit, as pre-pack administration is an effective way to preserve jobs and ensure that a viable business can continue in the form of a new company.
A company restart differs slightly in that the assets are sold prior by the old company to repay creditors before it enters into administrative dissolution.
Find out more about Pre-pack Administration
Find out more about Company Restart
Consultancy and advisory services
Sometimes a business may need advice before it is necessary to go into a formal insolvency procedure or if the financial problems are only just starting to show. Our consultants are specialist in dealing with insolvent companies, and because they are not Insolvency Practitioners they are not restricted to a limited amount of rescue or closure options. Instead they can take a broader view and work with you on plans that need a specialist eye.
Business closure options
For businesses that need to close or are unlikely to survive the pandemic.
Liquidation
Liquidation is where the assets of a company are sold to settle it’s debts, this can occur in two ways; compulsory liquidation and voluntary liquidation. The assets of the insolvent company are sold during the process of both types of liquidation, and the proceeds are used to settle creditors.
The steps taken either in a voluntary liquidation or compulsory liquidation are slightly different.
However, regardless of the type of liquidation, be it compulsory or voluntary, the outcome is still the same; it involves selling all the assets, properties and holdings of the company, accompanied by total dissolution and closure of the business.
Administrative dissolution
Administrative dissolution is an alternative to liquidation and can be used when there are no assets to liquidate or no funds left in the company bank account.
This process can be performed by the director themselves, allowing them to retain control and also ensuring unnecessary costs are not incurred.
The process does not demand that 3rd parties are given intrusive access into the business operations and the affairs of the directors personally. If correctly undertaken, a strike off has no lasting negative reflection on the directors.
Find out more about Administrative dissolution
Next steps
To find out which solution is best for your business call us today on 0800 975 0380 for a free and confidential chat. Alternatively you can email us on [email protected]
We're here for you.
As a dedicated team of Advisers and Consultants our aim is to help you fix the issues and solve the problems within your business.
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