01 UNDERSTANDING THE POSITION
Can the business recover?
Rescue starts with an honest review of what the company earns, what it costs to operate and why debts have built up. A temporary cash shortage needs a different response from a business that loses money on every contract. The aim is to identify a workable future rather than postpone the same problem.
Further reading: GOV.UK guidance on formal company repayment arrangements.
We help directors organise the financial picture and compare informal negotiations with formal restructuring options. The assessment should include current trading, funding commitments, employee costs, tax liabilities and the effect of any creditor action.
02 PRACTICAL CONSIDERATIONS
Building a practical recovery plan
Prepare a short-term cash-flow forecast using realistic receipts and payment dates. Separate essential trading costs from spending that can be reduced, and check the value and collectability of outstanding invoices. Any repayment proposal must leave enough money to meet new liabilities as they arise.
Possible routes include agreeing revised terms with creditors, seeking an HMRC Time to Pay arrangement or considering a Company Voluntary Arrangement. Administration may need consideration where the position is more complex or urgent. None of these routes is suitable for every company.
03 YOUR NEXT DECISION
When recovery may not be realistic
If the company cannot meet ongoing costs or fund a credible proposal, closure may need to be assessed alongside rescue. Directors should consider creditor interests and take advice before transferring assets, making unusual payments or committing to further borrowing.
