Reviewed: 27th February 2015
Having out of control debt in a business is never a good position to be in. You may be at the stage where you have tried to raise money from the bank, you’ve looked at factoring or even tried to attract investment. These are all good ways of raising funds and bringing your company debt under control, but depending on your circumstances these can be difficult to arrange and can often take time to put in place. If you continue trading whilst insolvent then you’re putting yourself at risk of wrongful or even fraudulent trading, potentially making you personally liable for your company’s debt. If you can’t see a way out of your financial troubles, then you may have to take the decision to cease trading. Whilst this is an extremely tough decision, and it may seem like the end of the world, it can also be seen as a new beginning.
Apart from the current debt levels or cash flow problems, your business model may actually be good and would be successful if it was not being restricted by the current circumstances. Trying to manage large amounts of debt whilst still keeping the company running and the staff employed is very stressful for the business owner. This may impact on the decisions you make as you are always thinking about how to deal with the debt. If you can just get away from the debt then it would give you a chance to focus on running a good business.
You will need to take professional advice, but there are ways in which you can write off your debts and start afresh. You may even be able to buy the work-in-progress and the assets of your old business at a fair value, which would give you a good start for your new venture. This also means that your staff from the old business can transfer to the new one, which would be saving the jobs of the people you had previously employed. Trying to manage the debt of a struggling business can be very timely, but by restructuring in this way and starting again, the debt of the old business will be gone allowing you to concentrate on building a new and successful business having learnt valuable lessons along the way.
Real Business Rescue can talk with you confidentially about the very real prospect of writing off your business debts and starting again. With 55 offices stretching from Inverness down to Exeter, Real Business Rescue can offer unparalleled director advice across the UK.
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The number of independent retailers who closed down outlets during the first half of this year reached a record high level for any comparable period.Read More