What are the options for limited companies struggling with business debt?
Debt is not necessarily a bad thing for a company; when utilised correctly, debt can be an extremely useful tool for a thriving business. Debt can allow a business to grow and expand into new markets, open additional premises, and increase operational capacity.
When company debt becomes unmanageable, however, problems can soon start to mount and advice needs to be sought. The step from feeling the pinch, to becoming technically insolvent, can happen surprisingly quickly. Depending on who you owe money to, you may find your creditors begin to pile pressure on you to pay and may even threaten legal action against your business if you are unable to bring your arrears up to date.
Whether you are struggling to pay trade creditors, cover your utility bills and other overheads, or have fallen into tax arrears with HMRC, taking swift action is paramount. The sooner business debt problems are addressed, the more options will be open to you and your company.
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The importance of expert company debt advice
Taking company debt advice from a licensed insolvency practitioner will help you to better understand the situation you are in as well as the potential rescue and recovery strategies that can help get your business back on a solid financial footing. If it is determined that the company’s debt problems have taken it beyond the point of rescue, you may be advised that closing the business via a liquidation process is the most appropriate course of action.
While no company director goes into business thinking they will find themselves in the position of having to contemplate an insolvent liquidation process, in some instances it is the best solution for both the company and its outstanding creditors.
By seeking the advice of a company debt expert, such as an insolvency practitioner, you are demonstrating your desire to protect your creditors from any further losses even if this ultimately involves the liquidation of the company. When a company is liquidated, creditors may be able to recover some of the monies they are owed following the sale of company assets. For the directors of the insolvent company, liquidation offers a fresh start free from the burden of unmanageable business debt.
I knew I needed to close my company but I wasn’t sure how to go about this with large debts that I was unable to repay. Scotland Liquidators clearly explained my options and held my hand throughout the entire process.
Catherine Muller | Director
I would highly recommend Scotland Liquidators to anyone considering closing their business. From the first phone call I knew where I stood and what my options were. I cannot thank them enough.
Jonathan Booth | Director
Scotland Liquidators helped me close my company last year after I made the tough decision to stop trading. My advisor was patient, knowledgeable, and supportive from start to finish. Many thanks.
Colin Franklin | Former CEO
