Raising Capital to Pay HMRC

Options exist, raising capital to pay HMRC and avoid liquidation.

Invoice finance?

Two types of invoice finance options available:- 

Invoice Discounting. – Once goods delivered and signed for, and the invoice issued. The lender will pay a proportion (Variable) to your company. When you the supplier receive payment from the customer. Then you keep an agreed amount, and the balance sent to the lender, including fees. The supplier retains control over the sales ledger and responsibility for the collection and receipt of the debt.

You then may use this to repay your bank loan. Saving late payment fees, extra unplanned interest, and a fee for termination of the contract from the bank facility. Thus ensuring the business has fulfilled its payment duty to the bank. We deal with over 35 lenders, helping to improve your business cash flow.

Invoice Factoring.– Once goods or service delivered and the invoice issued. The lender, transfer’s most of the balance to your company. When the customer offers payment, they pay the lender directly. The lender transfers an amount, previously contractually agreed to your bank less any fees. The lender, in this case. Therefore, retains the primary control, over the collection of the debts from your customers and not you. You, in effect, assign your sales ledger over to the lender as security.

Invoice finance speeds up cash flow dramatically when a service or goods received. Once Invoice raised. The cash as per the value of the outstanding invoice is then, released by a lender (Not 100% though). Invoice finance assures fast access to funds quicker but can be at a cost.  

When unable to pay the business bank loan?

Starting a new business venture remains difficult and requires planning. One main problem remains when financial liabilities eat into the profit of the business affecting cash flow. Usually, pressure from the business bank does not help. They are concerned that you make repayments on a business bank loan on time. If pay dates missed. The bank starts sending reminder letters and advises overdue interest. Increased repayments then required each month, increasing further financial pressures. To deal with this, you may consider restructuring and take actions to raise additional finance. This may help assist in the rescue of your business. Avoiding a build-up of debt and sinking into arrears, with your bank. 

If though unable to pay your business bank loan? Then seeking advice from an independent Licensed Insolvency Practitioners such as HBG Advisory will help. Failing to pay your bank can affect other creditors.

Raising Capital to Pay HMRC.  – What happens when you default a business bank loan?

When you realise you no longer able to pay the business bank loan. Then you should seek help from your bank (See links below). The bank will charge late payment fees. You will incur increased interest costs and administration costs for every payment missed. 

Depending on the bank or financial institution. Missed payments over a three or more month period remain then, recorded as a default on the business credit file.

A default recorded on the business credit record reflects poorly. Indeed, it highlights risk factors. A poor credit record may affect future eligibility for finance so take care.

Raising Capital to Pay HMRC  – Seizure of assets?

A secured business loan lent against a specified property or another tangible asset. Therefore if you default on the payment, then the outstanding amount may be recovered by taking possession of the assets. Commercial property, machinery, vehicles and equipment, though remain then allowed to be repossessed. Only though if and when you fail to repay your business loan.

Often banks ask for personal guarantee agreements if a Director has no credit history. It means that signing a personal guarantee makes the director liable to pay the loan back if the company fails. This agreement stays in place even after liquidation. 

Raising Capital to Pay HMRC  – Looking at refinancing a business loan?

Refinancing your business bank loan may work out to be a cost-efficient option to repay your commercial loan. If you source a better deal than your existing loan? Then this may help minimise current debt, with a cheaper debt deal.

Further, refinancing helps reduce interest rates along with longer payment terms reducing monthly outlay. When a cost-effective option is not available, and your ability to gain credit is, therefore, damaged? So, consider an Insolvency process.

For further help on finance> Please read, Available Loans for Businesses In The UK.

Once you realise your business heads towards insolvency, you then may wish to consider a Creditors voluntary arrangement (CVA)  A CVA will help keep the business afloat. A CVA allows your business to negotiate formally, terms with the business creditors. Based on the belief, the company can return to profitability again. A CVA protects the business against legal action by creditors.

For further reading, please view: ‘Options paying PAYE arrears.’

Meet THE TEAM at HBG Advisory.

Help with REDUNDANCY CLAIM as a director.