Businesses can often arrive at a point where business recovery is required – there are a number of possible options. Until all the facts are established it is difficult to give positive advice about the right course of action. A key question is whether the fundamental business proposition is sound or the business can be saved – the recovery is likely to include some cost savings, team redirection; developing the business proposition. The choices possible are very different if recovery is possible.
To consider recovery a plan will be required showing how this can be achieved; the historical indebtedness can be resolved in a number of ways once a viable business plan is accepted.
The business can trade out of its financial difficulties with the support of its lenders, or major creditors; and or some fresh cash injections. Another alternative is to obtain a company voluntary arrangement which will allow creditors to be repaid in part or full over a longer period – say 3 to 5 years. Another alternative is a creditor’s voluntary arrangement. Creditors will, if persuaded, voluntarily agree to take a payment in full or part over a number of months – probably 3 to 5 years.
There will be cases where the business would have a greater chance of success if it could avoid some onerous contracts and in this case a prepack administration could be the solution. The business would be set up without the onerous need to repay the creditors – the administration will take care of this. Company turnaround experts may well be required for a short period to ensure the business is successful; the first step is to explain in some detail the business situation, take advice on the recovery options and agree a course of action. Talking to a professional will help uncover all the options and agree the course of action.
Establishing the plan and all the financial circumstances will provide the comprehensive information required to enable a viable solution. Our advisers can help by asking the right questions, using the plethora of case studies to explain what the next steps will be; guiding the process.
The need for business recovery is common from small to extremely large companies – the cause of requiring recovery vary but the route to recovery will require a plan, some support from creditors or lenders, a cash injection. Talk to one of our advisers to establish the business solution for your company.