Reviewed: 21st June 2019
I can't pay my business partner - what now?
Being unable to pay your business partner in any context is a difficult state of affairs, and one that can seriously undermine the effectiveness and longevity of your business operation.
There are ways to move forward when your partnership is facing financial hardship, however, so what can you do to ease the situation and is there any positive action you can take to solve it?
What can I do if I can’t pay my business partner?
If your partnership is founded on a written partnership agreement it may state how a situation like this is to be resolved. The aim of writing a partnership agreement when the business is first formed is to formally lay out the rights and responsibilities of each partner in various scenarios.
This may include what happens in ‘non-standard’ situations such as severe financial difficulty or potential breakdown of the partnership, and its contents can help to guide you towards a satisfactory conclusion.
What help is available if I can’t pay my business partner?
When you’re struggling to pay any form of debt or creditor, it’s important to seek independent professional advice. Licensed insolvency practitioners (IPs) will assess your financial position, clearly explain all the options, and guide you towards the most appropriate one for your circumstances.
Additional financing
Securing alternative finance is just one potential solution that could relieve the financial pressure on your business, and provide the additional working capital you need in this situation.
You may be eligible for invoice finance if you routinely offer credit facilities to your customers, for example and in this case borrowing is based on the value of your sales ledger. You can also pass control of collecting your debts to the lender, which would allow you to focus on generating more money.
Restructuring in insolvency
Depending on the type of partnership, if it has entered insolvency formal insolvency procedures such as a Partnership Voluntary Arrangement (PVA) or Partnership Administration Order (PAO) may also be suitable.
Both processes offer the opportunity to restructure debts, and could create the ‘breathing space’ you need to regain control of your partnership’s finances. If you would like to know more about your options when you can’t pay your business partner, Real Business Rescue can help.
We’re insolvency specialists and offer dependable unbiased advice to businesses in all industries. Call one of our expert team to arrange a free same-day consultation – we operate from a network of offices throughout the UK.
Further Reading on Articles about Business Liquidation Bankruptcy
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
- How to manage company cash flow problems
- Advice on dealing with HMRC
- Understanding rescue and closure options
- And much more...
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
- Helping you advise insolvent clients
- Spotting signs of client distress
- Exploring business rescue options
- And much more...
