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Updated September 1st,2020

Company Debt Advice

Company debt advice. Whether you want to walk away from the industry or wish company debts be written off and start again.

HBG Advisory help you with dealing with company debt. Company debt advice, in plain easy, to understand language is essential.

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

Then perhaps the company is insolvent?

Options exist to mitigate financial pressure.

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

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

Coronavirus COVID19

The UK Government has instigated a significant support programme to help UK business 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 unable to go to work.
  • Self-employed people can receive up to £2500 per month in grants for at least three months.
  • Bounce back loans.

The main reason directors approach HBG Advisory for confidential advice on business debt solutions are?

Debt can arise for a variety of reasons.

being:

  • Outstanding large debtors enter insolvency. Therefore affecting your cash flow and solvency.
  • Therefor potential to write the debt off, additionally,
  • Fast growth in your business results in a business extending time to repay the initial stake.
  • Further, a questionable scheme runs up added, sudden and notable expenses (typical 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 such as Coronavirus COVID 19.
  • Creditor pressure.
  • Unstable financial position.
  • Failing HMRC time to pay.
  • Debt Management scheme unaffordable.
  • Debt management plan failure.
  • 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.

HBG Advisory advises clients on company debt solutions, on the best way forward. 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 liable for the companies debts? The liability for dealing with debt is that of the company itself, as it is the company that is owing money.

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

A limited company protects officers of the company. Protection though can be broken, if they do not operate the company properly and trade insolvently.
A Limited company, by its very name, has limited liability as such is liable for company debts incurred as the company.

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

Further, directors are held liable in circumstances where they have been 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, then that is the company debt.

What happens when it has too much Debt?

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

Having too much debt will cause the company financial difficulties. If the company starts entering into time to pay arrangements, usually this indicates the company may be trading insolvently.

Trading whilst insolvent may be deemed fraudulent trading.

Once proven, directors to be held personally liable for the companies debts.

How can I pay off my Company Debt?

So if your cash flow allows and you have support from creditors, then 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 raising additional working capital, either through commercial finance, as loans or additional investors. Again tread carefully and seek advice.
Finally, consider an Insolvency Procedure.

Formal insolvency, whether it is Rescue or recovery, requires a Licensed Insolvency Practitioner who will explore options with you.

Corporate Recovery is vital in situations involving solvency and creditors.

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