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If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448.

Unable to pay Companies Suppliers?

When your business is unable to pay company suppliers during Coronavirus COVID-19.

HBG Advisory are working seven days 9 am to 8 pm to assist distressed directors and their companies. Our team will help you through this unprecedented problematic era.

For same-day assistance & free initial advice, please telephone 0800 612 5448 or arrange a virtual meeting in total confidence.

Worried about issues like the above, and can’t pay back your bounce back loans weighs heavy on directors. However, solutions are available to help.

If you experience late payment debtors of your Company, encounter technical issues, contracts cancelled by customers or sales depleting, including the Coronavirus? Then the impact unplanned can have a severe effect on your profitability. 

Make sure you control the situation by taking planned action with help from HBG Advisory. 

Are options available?

YES.

  • It is essential to seek advice at this point from a Licensed Insolvency Practitioner.
  • Is your business viable?
  • Does it require Closing?
  • Protect your interest as a Director.
  • Protect Interest of Creditors.

HBG Advisory have highly experienced Insolvency practitioners to hold your hands and guide you through this stormy period.

Dealing with suppliers you can’t pay, and advising them so

Many directors worry about not paying suppliers more than the HMRC. Suppliers can stop production and trade if supplies and stock run dry.

So be upfront with your suppliers. Many you have traded with for years. Many of them may have experienced cash flow issues themselves.

Usually, suppliers appreciate the truth about your business’ predicament.

Arrange an urgent meeting with your accountant and draw up a new cash flow. This will hopefully give you a clearer indication of when you may pay them. Providing you are factual on your payment dates, often suppliers appreciate your best efforts to resolve matters.

Financing and being unable to pay Companies Suppliers

Seeking commercial financing remains an option. 

We can look at and introduce you to providers who have a desire to help rapidly.

Formal payment settlements.

Should your Company only experience a short term issue, but lacks a cash flow, but can return to profit. Then a Company Voluntary Arrangement (CVA) can offer a solution for you.

A CVA requires consolidation of your company’s debt, so you get a monthly period of, say, 60 months. Therefore, it removes instant demand to pay creditors and is considered affordable. Creditors usually vote to accept this (Though not always) as perceived as a better outcome than a liquidation.

Are you closing your business for good because you are unable to pay company suppliers?

So, your business is beyond help. What afterwards?

A Creditors Voluntary Liquidation (CVL) will formally shut your Company down while dealing legally with your company creditors.

Known also as a CVL. Assets of the Company are sold (Liquidated) by agents of the appointed liquidator. Also, the Company officially ceases. 

Selling on Company (pre-pack)

Pre-pack administration remains a popular process when wishing to purchase assets from an original limited company, which is insolvent. A pre-pack administration allows trading to continue hopefully with little impact on customers. The debt remains with the original limited company. 

Usually, the deal is carried out before the Company has an administrator appointed, conducted by a reputable independent agent. The sale happens immediately; the appointment occurs.

The process ensures a seamless transfer, hopefully. Involving the previous team or even a new company. Phoenix companies exist from pre-packs helping in the ongoing employment of staff (Job Security. Hopefully, the process enables a better prospect for creditor payout.

For further reading on administration, please view ‘Administration, A guide for directors of a company‘.

Contact HBG Advisory for further help on how a pre-pack may help your business.

Should I stop trading with my Company?

If your company’s debts are greater than its assets, and cash flow can’t pay “as due creditors”. Then your company is considered insolvent. URGENT advice is required.

Therefore, cease trading immediately to avoid wrongful and fraudulent trading.

For further detailed reading, please check out ‘How to identify the symptoms of wrongful trading‘.

Failing to do so falls you foul of the Insolvency Act 1986 and Companies Act 2006.

Unable to pay Companies Suppliers and Wrongful trading

Directors of a limited company are required to be up to date on the day to day financial situation of their company. Further, in the event of insolvency, they have to ensure company shareholders remain informed. Then approach a UK Licensed Insolvency Practitioner, like HBG Advisory. They also are required to notify creditors of their position financially.

Attempts to trade while insolvent and to allow the financial position to deteriorate may be regarded as wrongful trading.

Trading Fraudulently.

Operating fraudulent trading exposes directors for considered knowledge-based action. Not deliberately paying creditors may cause directors exposure to a prison sentence. Further, selling your company assets before the liquidation of your company, or knowingly accepting credit, with no intention to repay, is considered a fraudulent action.

Therefore

Not being able to pay suppliers as and when due? Then financial options exist. However, how deep is the black hole? Failing to deal wholly with the problem still causes issues. Formal payment plans remain an option if viable moving forward. Failing which, closure by liquidation remains an option, opting to trade, knowing you have no funds to pay your companies, creditors remain fraught with danger. You risk trading your Company while having the knowledge you are insolvent, leading to wrongful trading.

How may HBG Advisory assist you and your Company?

Depending on your limited companies financial position, HBG Advisory may assist you and your Company on a product to operate with your business.

Assistance includes closing your Company down, raising additional finance or pre-packing the Company as a sale to a new entity.

Available Insolvency solutions

Insolvency generally puts stress on all those involved, so if you think your company is in the process of insolvency with debt that you may no longer manage, contact HBG Advisory.

Assistance – Limited Company.

If the debt is manageable and your business is viable? You may consider a voluntary arrangement allowing directors to remain while managing the company and repaying creditors. Other methods depend on the type of debt and creditors’ “willingness to work with you to minimise creditors’ losses while maintaining company viability.

The Team at HBG Advisory


Support Is Just A Call Away
Seeking support with your under performing business?We can remove all the stress while allowing you to move forward with your business removing the fog for good. Please call us on 0800 612 5448 or Book A Virtual Meeting safe and private. We help directors daily to navigate the complexities of financial difficulty.

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