Options & Solutions Guide for Companies Financially Struggling

Before the Punks outline the guide for company options, it is important to define what we mean. Company options are solutions that help the business collectively. Unlike personal or partnership options, they look at how the business operates as an entity. Because of this, they can be applied to enterprises of many different sizes. Company options may consider staff overheads, pensions, facility expenses, and cash flow. What are the company options that could help a business clear its debt?

No matter who a company has a debt with, negotiations are a fundamental part of reducing debt. If debt has accrued with a creditor, whether this is a supplier or a commercial landlord, a company must be willing to enter into negotiations with them. If the debt is not too excessive, it may be possible to negotiate what is known as a Company Voluntary arrangement (CVA). This will give a company extensive time to pay the debt, and they usually last between three to five years. At least 75% of creditors must agree to a CVA for it to be finalised.

If it is a prolonged debt and the creditors have already taken legal action against a company, a company may need to negotiate with their respective county council. For instance, a creditor may have issued a winding-up order to a company, but it is not too late to re-negotiate terms with the respective creditors. A company or director can apply to cancel a winding-up order if they deem it to be unsuitable for paying the creditors. This must be done within five working days of the order being issued.

If debt has accrued through tax, then a company must conduct negotiations with the HMRC. During these negotiations, a Time to Pay arrangement (TTP) will be sought by the business. If a company can successfully obtain a TTP, it will have an additional 12 months to pay off a debt, and the debt payments will be organised so they can be sustained over the agreement. VAT bills are often the most common form of tax arrears, which is a direct solution to that issue.

A company intending to conduct negotiations with HMRC or creditors must be willing to show the intent to pay. If it has a negative reputation, then it may be difficult to achieve the desired agreement. However, with experts like us in your corner, a business will have a greater chance to secure the agreements during the negotiation process.

If a company needs help from an external practitioner, it may want to consider administration. In the process of administration, the total debt will be analysed, as will the methods by which it can be paid back. They may also look at the business model and the existing shareholders. If they decide that the assets can be sold to rescue a company, they will begin to organise a sale of them to existing shareholders or those who register new interest in the company. This is known as a pre-pack administration.

For a company considering administration, it can be daunting not knowing if they will declare liquidation. Most bog-standard insolvency practitioners will consider the solutions alongside insolvency and creditors. However, we are different in that we always prioritise the business. If the Boardroom Punks can find a way to get a company out of trouble, then we will certainly exercise this option.

Other options for a company that is struggling include financial options like fixed loans, cash flow analysis, and logistical solutions. In specific reference to company options, the Boardroom Punks are happy to apply their business knowledge to the existing business model. A thorough examination of how a business operates can help reduce liabilities, increase productivity, and minimise future debt.

If you are part of a company or own a company that needs to implement changes, then do not hesitate and get in contact with us. With the application of the options above and a thorough analysis of your business model, we know we will have a good chance of clearing any debt. The Boardroom Punks are experts at applying their knowledge in the right areas.

Even with the help offered in this guide, your problem may be too specific to rely upon this advice alone. The Boardroom Punks understand the intricacies of business as we are a team of business-savvy professionals who take their trade seriously. If you do require further help, then feel free to book a call today. All inquiries are confidential, and you can be assured that we will approach your problem with respect and dignity. Our alternative solutions are always geared toward saving a business rather than insolvency or liquidation. The Punks have your back!