The Government has announced that it intends to increase the minimum level of debt for which an individual can be made bankrupt from £750 to £5,000.
It’s been a tough few years, but hopefully things are at last looking up. Orders are starting to come through and the business world looks a much rosier place.
With the economy continuing to show signs of recovery, more SMEs are feeling confident about their future. However, this doesn’t mean they are all completely stable, as recent research shows that a growing number are exhibiting financial difficulties. Read more
For both politicians and the media, pre-packaged sales of businesses out of administration (or “pre-packs”) are often highly controversial, particularly when the sales are back to the directors or management of the failed enterprise. There is a perception that pre-packs are often abused by unscrupulous directors to simply “dump debts” and start afresh free of troublesome liabilities, and all for far less than the true value of the business.
Often one of the major obstacles preventing SMEs from growing, or in some cases surviving, is the lack of available finance. Even those with the right credit history don’t always get the help they need from the major banks.
New research published by the accountancy practice Wilkins Kennedy shows that retail insolvencies were at their highest level in 2013 for five years. The figures highlight that despite the economic recovery, the number of retailers falling into financial difficulties continues to grow. For the year to the end of March 2014, 1,287 retailers became insolvent.
When a company requires corporate recovery advice or enters the insolvency process, it shouldn’t necessarily mean the end of the business. In many instances, the company remains viable and could be saved through a process of restructuring.
Even if you have the world’s greatest products or services, and even if you have the world’s greatest business model, your business will never succeed or be profitable if it doesn’t get paid for what it sells.
If you run a busy company then it can be easy to ignore the early signs that you may be in trouble financially. Debts tend to creep up on you quite slowly and unless you really have your eye on the ball it can be hard to identify potential problems. However, before you know it, things can take a very swift downwards spiral and from there on it can be very difficult to get back on top.