How to protect your business from financial difficulties
Mr Bankruptcy
28th February 2022
Over the past two years many businesses have had to review what they do, how they operate and what changes they need to make to ensure their longer-term survival during unprecedented times.
It has revealed how resilient businesses can be, but also how precarious they can be; so how can businesses protect themselves from financial difficulties in the future?
6 steps to better financial management
A few key steps can make all the difference to protect your business from financial difficulty. These steps are about managing costs, managing information, and using that information to make the adjustments needed to keep on top of the financial situation:
- Have a plan: You need to know where you are, where you want to go and how you’re going to get there to identify how resources are allocated to avoid waste. It ensures you know if you’re not heading in the right direction so you can correct your course.
- Manage costs: Knowing your day-to-day costs is important, so you know how much it cost to operate effectively. When times are challenging, cutting costs can help protect you, but sometimes difficult decisions have to be made when managing costs and where to make cuts.
- Manage your debtors: A good credit control process is essential to manage cashflow and this is vital to secure the long-term financial security of your business. Clear terms and a strong process can help ensure invoices are paid on time.
- Track financial data: Keeping accurate records and reviewing them regularly makes you aware of your financial situation, can spot warning signs and areas of difficulty and adjust before it’s too late.
- Review client and supplier contracts: Make sure these are the best terms for your business and you’re not committed to anything that can’t be delivered.
- Talk to creditors: If paying creditors is proving too difficult, talk to them early on to see if alternative arrangements can be made, rather than them taking action that may put your business at risk.
Avoiding the personal cost
Perhaps just as important as protecting your business from financial difficulties is being able to spot the signs that you may be in difficulty. Struggling to pay creditors, reduced revenue, losing clients, poor cashflow and at a personal level, higher anxiety and inability to sleep because of business are all signs that you need support.
Seeking advice early on will help you take back control of your business’s financial situation and rebuild for the future as well as reducing stress on yourself, your family and friends.
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 who face unmanageable debt or who are 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.
I can’t pay back my business bounce back loan. What do I need to do?
By Mr Bankruptcy
18th February 2022
Over 1.5 million businesses were approved for a loan through the Government’s Bounce Back Loan Scheme between May 2020 and 2021. If you own one of these and are worried about how you can repay the loan, it’s important to understand the options available to you.
What is a Bounce Back Loan?
Bounce Back Loans were introduced to help businesses access emergency finance which would support them through the pandemic. Up to £50,000 could be borrowed, interest free for the first 12 months, and no repayments were required during this period. After the 12 months were up, the interest rate was 2.5% and repayments expected monthly.
What happens if businesses struggle to pay back the loan?
Ongoing financial pressures and a stop-start end to lockdown measures have led to some businesses struggling to start repaying their loans after 12 months.
While the loan is backed 100% by the government guarantee for lenders, you will still be pursued for repayment by the lender, through their normal debt recovery processes; you may receive demand letters, debt collection agencies, court action or eventually a winding up petition.
Easing the burden of repayment
To help with the repayment of Bounce Back Loans, the Pay As You Grow (PAYG) scheme was introduced, offering several ways to manage repayments:
- Pausing payments for 6 months, although interest will continue to accrue during this period.
- Extending the term of the loan from six to ten years
- Making interest-only repayments for six months, which you can do up to three times during the loan period
These measures will be welcomed by many businesses, but some will still struggle to repay the loan and other options will need to be considered.
Finding support to explore your options
If your business is struggling with wider money issues, the inability to repay your Bounce Back Loan may just be a symptom of an underlying financial problem, but you can seek expert debt advice to help your business deal with a debt problem.
There are several informal and formal debt management options available that can help you to manage your debt better and minimise its impact on your business’s long-term viability.
Many owners fear the liquidation of their business when debt becomes unmanageable but, with the right support to work with your creditors, a way forward can often be found.
A company Voluntary Agreement or entering into the administration process are other options to explore with a professional debt advisor to alleviate the burden of debt. Whatever you decide, it’s important to take action as soon as possible, after the challenges and uncertainties of the past two years, to work towards a more positive future.
James Rosa Associates
We are 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 who face unmanageable debt or who are 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.