This is a phrase that we hear everyday. It is uttered by businesses large and small. Every sector of the economy is now encountering problems as access to funding has dried up and the consumer spending boom ratchets back in. People who are afraid of their own debt levels, and employment prospects, decide to spend less on impulse purchases and instead consolidate their finances, by paying down debt or saving.
The effect of this is that sales on the high street suffer. This exacerbates the problem, by meaning that these companies suffer a down turn in profits which results in them having to shed jobs to maintain profitability.
Everyday in the news another High Street chain closes or files for administration. Each one of these takes its supplies from British companies who either manufacture themselves or import from abroad.
From textiles to estate agencies, from mobility scooters to dyers, everybody is having to tighten their belts.
For many there is nothing left to tighten. For others the time they have to react is just too short.
However for everybody there may be a solution. As with all things insolvent, timely intervention is the key. The earlier a solution is explored the better chance it has of being successful.
There are a range of solutions which include non insolvency turnaround, through dividend returning CVA’s and Administrations to pre-pack sale administrations and liquidation to the straight forward liquidated closure.
The fact that the limited company shell may have to close does not mean that a business dies. If you have a company that is bust, you need to take professional advice and take steps to minimise losses to your creditors. Failure to do so may cause problems for you in due course if you cause additional loses. This may result on personal liability for the directors as a result of wrongful trading.
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