Recent research has shown that a worrying number of British businesses fear that they would face closure within less than a year if their venture encountered a ‘critical event’ – such as the unexpected death of a key employee. The research also picked up data on credit card and other types of borrowing to cover costs amidst a general feeling of uncertainty about the future.
This article looks in more detail at some of the report’s findings, and looks at how Licensed Insolvency Practitioners can help turnaround businesses faced with a critical event. They’re not just for Liquidation and Winding up.
What does the research say?
The research, which was carried out by a major UK based insurance company, found that around 65 per cent of UK small and medium-sized enterprises (SMEs) have some form of business debt – an increase of 33 per cent over figures recorded in 2011.
The report also revealed that an increasing number of businesses are turning towards borrowing in order to get by. During the period studied, it found that the average SME borrowed around £176,000.
The Researchers discovered that 19 per cent of respondents had borrowed £50,000 or more on a credit card to cover their costs, while a further 19 per cent of business owners said that they had been forced to take out a personal loan in order to prop up their business.
Furthermore, 67 per cent of business owners said that they feared closure, should a ‘critical event’ hit their business – while 53 per cent believed that the death or illness of a key employee would push their enterprise over the edge within one year or less.
How can Licensed Insolvency Practitioners help?
Any critical event will adversely affect a business and in uncertain times this is especially the case. Insolvency Practitioners deliver all of the formal and informal solutions to business owners and managers – Liquidations, Administrations and CVAs. However, the primary aim is to help businesses avoid problems or get out of problems without going insolvent.
At the first sign of difficulty or hint of distress – cash flow problems, HMRC Debt, Creditor Pressure – it is imperative that business owners and managers consult with a Licensed Insolvency Practitioner to ensure that as many options as possible are available.
Insolvency Practitioners like http://www.antonybatty.com/company-liquidation/creditors-voluntary-liquidation/ have evolved in recent years from process lead liquidators to business experts with the tools and experience to help businesses facing financial problems avoid insolvency and turn their fortunes around.