Nationwide Insolvency Practitioners
  • Home Page
  • About Us
  • News
  • Contact Us

Call FREE Business Rescue Advice: 0300 303 8284

Request a consultation
  • Liquidation
    • Company Liquidation
    • Creditors’ Voluntary Liquidation
    • Members’ Voluntary Liquidation
    • How Does it Work?
    • How Long Does it Take?
    • How Much Does it Cost?
  • Administration
    • Company Administration
    • Advantages and Disadvantages of Administration
    • Pre-Pack Administration Process
  • CVA
    • Company Voluntary Arrangement
  • HMRC Debts
    • HMRC Arrears
    • HMRC Time-to-Pay Arrangements
  • Winding Up Petitions
    • How Do Winding Up Petitions Work?
    • How to Stop a Winding Up Petition
  • Help Centre
  • Get a Quote
    • Liquidation Quote
    • Administration Quote
    • CVA Quote

Expert Advice 0300 303 8284

  • Free Advice

Do you need Advice, or want to close your business?

    Your data is secure
    1. Home
    2. News
    3. My business is in financial distress– should I put in more of my own money?

    My business is in financial distress– should I put in more of my own money?

    Debt Advice

    If your business is struggling, it may be very tempting to invest your own money to try to save it. However, if your business is in financial distress and in need of extra funds, there’s a strong chance your cash will simply be swallowed up and you won’t see it again. Craig Johns at The Insolvency Expert explains further. If your business is registered as a limited company then generally speaking, as a director you’re protected personally if things go wrong. This is because your business is a separate legal entity and investing your own funds personal funds means that if the company fails, you will be treated in exactly the same way as any other investor or creditor. Firstly, you should consider other ways to get cash in to the business quickly. For example, can you sell more stock, chase late payers, offer customers an early payment discount perhaps. If the business is in financial distress then it is unlikely that the bank will be willing to provide new funds or extend your overdraft facility. Examine why the business is failing. Have sales decreased and is there any scope for improving sales by methods such as price cuts. Carefully review all outgoings and consider whether there are any areas where you can cut your costs and save money. A move to cheaper premises may be possible, or could you renegotiate with your existing suppliers for better prices or find alternative suppliers. Letting staff go is always a tough decision to make, but perhaps you could offer reduced hours until sales recover and the business is in a stronger position. Remember that if your business is technically insolvent, that is, where your liabilities are greater than your assets or you can’t pay your debts when they fall due, then continuing to trade and adding to those debts could make you as a director personally liable for the company debts, so be sensible, don’t bury your head in the sand and don’t continue to incur further company debts. If you believe that you are at a point where insolvency is possible, then it is essential that you seek professional advice immediately from an insolvency practitioner in order to protect yourself rather than continuing to trade and making the situation worse. As a director, you have a responsibility to your employees, shareholders and creditors and you have to know when enough is enough and make the decision to cease trading. Our ultimate goal here at The Insolvency Experts is of course to find a means to help your company survive financial distress. Financial distress doesn’t automatically have to signal the end of the road for your company and simply investing your own funds as soon as there is a problem is not advisable unless you have sought the expert advice of an insolvency practitioner. For this reason, contact us immediately you recognise a potential problem.

    Contact us

    Craig Johns will provide confidential, honest advice and can be contacted on 0300 303 8284 or at enquiries@theinsolvencyexperts.co.uk.

    Categories

    • Bankruptcy
    • Business Rescue
    • COVID-19 Advice
    • Debt Advice
    • Frequently Asked Questions
    • Insolvency
    • Latest News
    • Liquidation

    Accreditations

    Chat with us

    Our Costs

    At the Insolvency Experts we think that our service offers excellent value for money. Depending on your circumstances, our services can even end up being effectively free of charge.


    Get a quote
    Get free advice

    © The Insolvency Experts 2017

    The Insolvency Experts is the trading name of Cowgill Holloway LLP registered at Regency House, 45-53 Chorley New Road, Bolton BL1 4QR and registered in England and Wales with registered number OC316195 with offices in Bolton and Manchester.

    Legal

    • Privacy Policy
    • Site Map
    • Terms & Conditions

    Call us now

    0300 303 8284