Business owners (and many advisers) have a limited knowledge of exactly how it could work for them and what other options are available.
If you’re a business owner, you’ll doubtless welcome the recent news of government plans to launch a state-backed bank. It will be specifically there to increase lending to small firms.
Since the collapse of the banking industry at the start of this global recession, there’s been a dearth of credit available to Small & Medium Enterprises (SME’s). In the UK, SMEs account for 99% of all enterprise in the UK. With 58.8% of private sector employment and 48.8% of private sector turnover.
Before the champagne bottles start to pop there’s a sting in the tail. It is not going to be available for between 12 and 18 months.
So if your business has serious cash flow problems and your bank won’t assist what other options are available? Using invoice finance can certainly fund cash flow in many cases, particularly for expanding B2B enterprises. Re-financing plant and equipment could be an alternative way to plug a funding gap.
Another option may be to try to attract private investors. But if your company’s balance sheet is overburdened with historical debt, they’re likely to be reluctant to pump money into what they think may be a lost cause. It is often in these situations that it may be essential to restructure the business to make the deal attractive to investors. One major problem, however, is that most business owners (and many advisers) have a limited knowledge of exactly how it could work for them and what other options are available. This is where a business turnaround and insolvency specialist can help.
Taking independent professional advice from a licensed insolvency practitioner gives your company more options, a better chance of preserving jobs, a better chance of survival and potentially a better outcome for your suppliers too.