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I cannot pay my staff/employees

Licensed UK Insolvency Practitioners FREE Meeting for Company Directors

We can help with serious company debts, HMRC and creditor pressure, VAT/PAYE/Tax arrears, cashflow problems and raising finance.

I cannot pay my staff/employees

Reviewed: 18th February 2016

It can be very worrying to realise that you can’t afford to pay your employees, but please understand that this doesn’t always mean the end for your business. We regularly help companies struggling with cash flow issues, and can advise on a range of fast finance options that would allow you to pay your employees, and relieve some of the pressure.

Invoice factoring and discounting

Invoice factoring involves ‘selling’ your sales ledger to a financing company, who take on responsibility for collecting your debts in exchange for a fee. Many high street banks have invoice finance departments, or maybe an independent, specialised provider would better suit your needs.

Invoice discounting is very similar to factoring, but you retain control of collecting your debts. This could be helpful if you want to keep the arrangement confidential from customers.

Asset finance

If your company is struggling with poor cash flow but has valuable ‘hard assets,’ why not try to leverage their value by releasing a cash lump sum? You retain full use of the assets, and the cash injection could help with paying your staff, as well as meeting other regular bills.

Short-term loan based on revenue

This type of loan would offer a percentage of your turnover. It’s a short-term option if you need cash very quickly, but it’s highly advisable to make sure you can meet the repayments in full without question.

Company Voluntary Arrangement

Although it’s not generally seen as an ideal option for any director, entering formal insolvency could be a good choice if the underlying business is viable. A Company Voluntary Arrangement, or CVA, would provide the breathing space you need to get the company back on its feet, as it effectively halts any legal action being taken.

This type of arrangement has to be negotiated by a qualified insolvency practitioner, who goes through company finances to ensure that it’s the most appropriate option, and also that you’re not repaying more than you can afford.

Not being able to pay your employees is extremely distressing, and a clear sign that you need professional guidance. It might just be a question of making a few adjustments to cash flow or selling a single asset, but once you start looking for help, you start the ball rolling towards a positive outcome.

For more professional advice, Real Business Rescue offers a same-day consultation in complete confidence. We have a network of 55 UK offices, and can provide the expertise you need to take the business forward.

Who we help

  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships

Contact our team

Jonathan Munnery
Andrew MacKenzie
Julie Palmer
Thomas Mckay
Keith Tully
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