Creditor Pressure

Have your business’s cash flow problems lead to demands for payment?

When your business is experiencing creditor pressure to pay its debts, and cash flow problems mean you can’t pay, this can cause serious stress and sleepless nights.

If your business is experiencing creditor pressure, threats of CCJs, or even a winding-up petition, you must act now to protect your business and the directors. Being put under pressure by creditors is not a good place to be, but burying your head in the sand and not taking any action will only make things worse.

Whatever position your business is in, we can work with you to decide how best to deal with creditor demands and work towards ensuring the future survival of your business.

Business debt recovery and creditor pressure: not all creditors are alike

In the course of running a business, there are a variety of different creditors you will have to deal with, and each of those creditors will have particular rights and powers when it comes to collecting a debt due from a business.

Your business’s creditors can include:

If you have more than one of these creditors putting pressure on you to pay your debts, it is important that you understand how each of these creditors should be handled. In the course of our work as Business Recovery Specialists we deal with each of these creditor categories and can advise our clients on the best approach.

If your business is experiencing creditor pressure then please do not wait any longer to deal with your cash flow problems. Let us help you to find a solution.

For more information, or a no-obligation conversation about your situation, contact us today, call us on 0333 222 8065 or email us on help@businessrecoveryspecialists.co.uk .

Trade Creditors and Suppliers

Whatever type of business you run, it’s likely that you buy in goods and services from suppliers in order for you to supply your own customers. Therefore any difficulty you have in paying these suppliers – who might then place you under creditor pressure – is a very real threat to your own business and its ability to continue trading.

There are a number of legal remedies available to your suppliers if they can’t collect the debt from you, which include:

In-house debt recovery

Most suppliers will start by chasing your debt “in-house”. You may receive numerous calls and emails demanding payment. If cash flow problems mean you have more than one creditor chasing you in this way, the stress of the situation can become difficult to deal with.

Debt collection agencies

Some suppliers will use debt collection agencies or even sell the debt to a collection agency, at which point the calls and emails can escalate further and place more pressure on you.

Legal proceedings

Your creditors may commence legal proceedings, such as statutory demands or applications for County Court Judgements, also known as CCJs. CCJs are a matter for public record and once obtained, will affect the credit rating of your business.

Winding up petition

A creditor who has obtained a CCJ against your business can (if unpaid) petition the court to wind up your company. A winding up petition has far reaching consequences for a business, including an advertisement in the London Gazette, the eventual freezing of all bank accounts while the petition is heard by the court, and restrictions on dealing with the assets of the company.

Multiple creditors and winding up petitions

If any of your other business creditors become aware of a winding up petition, they can “join in” or support the petition by adding their own debt. This can make the situation more challenging to resolve.

If you are struggling to pay trade creditors and/or suppliers and are facing creditor pressure, the consequences can be serious if you don’t take appropriate action. Contact us or call us on 0333 222 8065 for an initial free of charge discussion.

HM Revenue and Customs

HMRC have extensive powers to collect debts from businesses, and is able to exert considerable creditor pressure.

If your business is experiencing difficulties in paying HMRC, or is under threat of recovery action by HMRC, please click here for more detailed information on how we can help with this specific cash flow problem.

For help and advice in dealing with HMRC, contact us or call us on 0222 333 8065.

Banks Funders and Finance Providers

There are a number of funding options open to businesses these days, including some alternative business financing such as crowdfunding. However you finance your business, problems such as creditor pressure will occur if you do not keep to the lending agreement, or if a funder or finance provider perceives that your business is unable to repay its debt.

This situation can occur because the funder has conducted a review of the business and concluded there are problems, or the funder may have become aware of creditor pressure and recovery action such as a CCJ or the beginnings of A winding up petitions procedure.

Cash flow problems and solutions

Financing and funding can provide relief from cash flow problems, but if the business cannot keep up with the payments the funder has certain rights and powers to get their money back.

Often businesses will have provided “security” in exchange for funding, such as a debenture or the assignment of certain assets e.g. items of plant. The security will also allow a lender to withdraw funding and appoint an agent (an administrator or a receiver) to deal with the assets of a business.

Business finance solutions: working with your existing lender

Maintaining good relations with your lender/finance provider is a key factor in ensuring they continue to support your business, particularly through difficult trading conditions. This is something we can assist you with, as our services are backed up by years of experience in dealing with a variety of sources of funding.

If relations with your lender have broken down completely, leading to creditor pressure, we can also help you to find alternative business lenders or other sources of financing. Contact us or call us on 0222 333 8065 for a free initial discussion.

Landlords

If you are unable to pay the rent for your business premises, this can represent a very serious threat to your business, which will come under creditor pressure and you must deal with this problem sooner rather than later.

On top of the rights that trade and supply creditors benefit from, landlords have additional rights contained within lease or property rental agreements with a business embedded in law.

A landlord’s rights may include the right to re-enter the trading premises and lock the business out. They may also invoke distraint and seize your property in lieu of receiving rent.

Our team of Business Recovery Specialists are experienced at negotiating with landlords, especially when applying creditor pressure – the focus is always on preserving the relationship so that a business can continue to operate while dealing with rent arrears.

If your business is in this situation, it can be very stressful. Bringing in a professional to take over discussions takes the emotion out of the situation and can lead to constructive conversations that allow a solution to be found. Contact us or call us on 0222 333 8065 for an initial free discussion.