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Company Debt Advice & Support

Company debt advice & support. Written by John A Waller, Director. Reviewed December 3rd,2022.

Business Debt Advice

Whether you want to move away from the industry or wish company debts to be written off and start again.

HBG Advisory helps you deal with business debt. Business debt advice, in plain easy to understand language, is essential.

If the company suffers from financial difficulties and business debt, it can’t operate.

Perhaps the company is, therefore, insolvent and needs to consider a meeting with a licensed insolvency practitioner.

Options exist to mitigate financial pressure.

Business Rescue involves, therefore, negotiating with your company’s creditors. Important when you are unable to pay debts when falling due.

HBG offers online debt advice to company directors operating a company registered in England and Wales.

For further reading, please follow ‘business and company debt help’,& Free Insolvency Advice.

Company Debt Advice & Support – Coronavirus COVID-19

The UK Government has instigated a significant support programme to help UK businesses with Limited Company debts.

  • Loans, Tax relief and cash grants are available; additionally,
  • Employers may apply for staff to be paid up to 80% pay if they are unable to go to work.
  • Self-employed can receive up to £2500 per month in grants for at least three months.
  • Bounce back loans.

Do the main reason directors approach HBG Advisory for confidential advice on business debt solutions?

Debt can arise for various reasons.

Being:

  • Outstanding large debtors enter insolvency. Therefore, affecting your cash flow and solvency;
  • Therefore potential to write the debt off, additionally;
  • Rapid growth in your business results in a business extending time to repay the initial stake;
  • Further, a questionable scheme runs up, adding sudden and notable expenses (typically in construction);
  • Price increases from suppliers / raw materials, not budgeted;
  • Drop-in market share as well as oversupply affecting prices;
  • Sales drop, affected by economic pressures like Coronavirus COVID 19;
  • Creditor pressure;
  • My business can’t pay its creditors;
  • Unstable financial position;
  • Failing HMRC time to pay;
  • Debt Management scheme unaffordable;
  • Debt management plan failure;
  • Can’t pay VAT Bill.

Less common but equally problematic

  • A director or employee of the company committed fraud and took money out of business;
  • The board disagrees on a way forward for the business. Therefore, the focus has been lost;
  • HMRC Tax issues as well.

So your business struggles with debt?

Solutions exist to avoid liquidation.

The New Restructuring Plan.

HBG Advisory advises clients on the best way forward for company debt solutions. Offering advice you can trust.

Rescue Options for example

A Company Voluntary Arrangement, allows limited companies to maintain trading, protected legally, clearing former debt.

However, restructuring using a company administration may be possible.

Closure options

Additionally, if liabilities exceed assets.

A voluntary liquidation keeps you in control while avoiding compulsory liquidation.

Questions asked by clients?

  • Who is responsible for company debt?

Who is responsible for the company’s debts? The liability for dealing with debt is the company itself, which is the company owing money.

Directors control the financial situation of a limited company. Business and personal finances, though, often remain combined.

What is business insolvency in the UK?

A limited company protects the officers of the company. Protection can be broken if they do not operate the company and trade while insolvent.

A limited company, by its name, has limited liability as such and is, therefore, liable for company debts incurred as the company.

If you have signed personal guarantees, you will be personally liable.

For further reading, view ‘directors liabilities’.

Furthermore, directors are held liable when found guilty of wrongful trading, fraud with tax or creditors or misfeasance.

  • What is the debt of a company?

The debt of a company is what it owes. Examples are

  • Tax arrears owed;
  • Loans;
  • Creditors;
  • Winding Up Petition.

Add up the total liabilities of the company, and then that is the company debt.

For further reading, please view ‘Simple business debt guide’.

  • What happens when it has too much debt?

How to deal with your debts? What types of debt does your company have?

Too much debt will cause the company financial difficulties. If the company starts entering into time-to-pay arrangements, this usually indicates the company may be trading while insolvent.

Trading whilst insolvent may be considered fraudulent trading.

Once proven, directors are personally liable for the company’s debts.

  • How can I pay off my Company Debt?

So if your cash flow allows and you have support from creditors, you may informally carry this out. But take care, as you may be held liable for company liabilities.

How may you pay its debts? Explore finance options for raising additional working capital, either through commercial finance, as loans or as additional investors. Again, tread carefully and seek advice.

Company Debt Advice & Support & Dealing with a court judgment

You have 14 days to reply to a county court judgment.(CCJs)

However, you must do one of the following:

Failure to respond means creditors can instruct a bailiff or sheriff to have your assets seized.

Your creditors can apply to wind up your company if your assets are not worth enough to pay your debts.

Finally, consider an Insolvency Procedure.

Formal insolvency, rescue or recovery requires a licensed Insolvency Practitioner who will explore options with you.

Corporate recovery is vital in situations involving solvency and creditors.

Meet the Team at HBG Advisory& ‘About us at HBG Advisory‘.

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