Are you at risk of running a zombie company?

By Mr Bankruptcy

29th October 2020

Lockdown has seen the rise of a hoard of zombie companies across the country. The Guardian newspaper reported that 20% of businesses in Britain are zombie companies; could yours be one of them?

What is a zombie company?

A zombie company is the name given to businesses that can’t pay off their debts in full and don’t have the cash to invest and grow but are still able, just, to survive and operate day to day.

These businesses cling to their workforce and resources so that they can’t be reinvested in the economy and put to better use by firms with stronger long-term prospects. These companies, in turn, suffer from slower productivity, which depresses the wider economy.

What sustains zombie companies?

A combination of factors are helping zombie businesses to sustain themselves during lockdown:

Low interest rates. These have made it easier for businesses to keep up with interest payments but not to clear or significantly reduce their debts.
Lenders not calling in debts. It’s in the lenders’ interest to give businesses time to repay their debts so they let them continue repaying for as long as possible.
Government Schemes. In its attempt to save as many businesses as possible from closure, the Government introduced a raft of schemes to provide financial support to businesses as an interim measure but in reality, these companies may still not survive in the long term.

Could your company be a zombie company?

As the government pushes to reopen the economy, we will see many of the initiatives it introduced to support businesses over lockdown come to an end and we will begin to see just how many businesses are viable and how many have been just delaying the inevitable through Government financial support.

In our post why do businesses become insolvent we discussed the signs of a business in trouble, including:

Frequent defaulting on bills
Issues with cash flow
Unhappy staff
Extended creditors days
Falling margins

If your business is experiencing any of these issues and you can’t see an opportunity to turn around the financial situation and address your debts, it may be time to seek advice in order to address your debt rather than allow it to risk your long-term future.

James Rosa Associates

James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors facing unmanageable debt or involved in civil or commercial disputes.

Our services include:

Insolvency support
Negotiated settlements
Personal assisted bankruptcy
Mediation

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Find out if you qualify for a free consultation

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

It’s our 10th birthday and we’re ready for the next 10 years

By Mr Bankruptcy

11th October 2020

The 11^th October will mark James Rosa Associates’ 10^th Birthday. Reflecting on the past 10 years, I am incredibly proud of the debt advisory services and support we have provided to many businesses and individuals. Yet, as we look forward, I am in no doubt that our services will be in demand as never before.

Why we do what we do

Our mission for James Rosa Associates has always been clear: “To be recognised as the most trusted source of debt advice and support in the UK with a reputation for excellence and integrity”.

This principle remains fundamental to how we operate. We know that in the most challenging of times, when a business or person finds themselves with unmanageable debt, it is important to trust their debt advisor to give them the confidence to make necessary changes.

Over the past decade I’ve seen the mental and physical toll that debt takes, often because people feel they’ve lost control. I experienced it myself, which was one of my motivations for creating James Rosa Associates. In our regular blog about debt, we talk about helping clients to take back control of their lives by providing clarity and understanding of their options so that they can make choices to move forward.

Ten years on, our purpose remains the same, to provide tailored debt advice underpinned by our core values to give people a way out of their debt problem.

Looking forward

Given the current UK and global financial difficulties as the world continues to tackle the coronavirus pandemic, we must prepare for the challenging times ahead as personal and business debt increase. In fact, The Money and Pensions Service predicts that in the UK, the demand for debt help will increase to 8 million in the next 18 months, reaching a peak towards the end of 2021. This will be an increase of 60% on current levels.

Our ability to remain agile in how we offer our range of services will be imperative, so we continue to review how we interact and connect with our customers, to continue providing end-to-end support services in a non-judgemental and supportive way, that continue to have the positive impact on people’s lives that we can be proud of.

I can’t predict what the world will look like in 2030 but I trust that James Rosa Associates will still be living up to its mission statement.