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Archive for October, 2011

Untangling a complex web takes skill

Sunday, October 30th, 2011

Personal debt can be difficult to deal with. Many individuals are obliged to seek help from trained debt advisors when they try to get their financial affairs in order. However, they can use free services and the issues they get help with do not generally get as complicated as those affecting firms with financial difficulties. Business debt analysis has to cope with a wider range of problems and the level of complexity is frequently high.

At Cooper Matthews we recognise the complexity of debts accrued by running businesses. We have the necessary expertise to help companies which find themselves in the mire.

It is of critical importance that distressed organisations seek advice promptly. Permitting complex financial arrangements to develop in an unhealthy direction is not a wise move. Creditors can seek to impose a winding up order even if the money owed is not all that considerable. To avoid a potentially disastrous winding up petition, employing a firm which uses qualified sector-specialist insolvency practitioners is an astute step to take.

Debts which firms owe can be complicated by the way in which the money was raised. Some debts might have property attached to them and a potential repossession must be stopped from happening. Other debt may be complex because it is owed to a diversity of firms.

Businesses can be in debt because of late payments or because they have not made enough capital to cover costs. It is also the case that not every company has the assets to cover a debt while others have; it can be tricky to work this out.

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Self-employed business debt can be dealt with

Thursday, October 27th, 2011

Being self-employed can be an isolating experience. If business takes a turn for the worse then it is often hard to keep a sense of proportion. If one has paid Class 2 National Insurance contributions, one is not eligible for the full range of state benefits. As debts accumulate, stress can build and damage performance.

At Cooper Matthews we can assist self-employed individuals who are struggling with their financial affairs. Often, the overall picture is not as dark as it might appear to be. Getting the correct advice in time can prevent the worst from happening.

Business debt advice is not just for large companies. Self-employed individuals have options which can be explored once their position has been assessed with care. The business financial problems can sometimes be sorted out completely and even if the business does not develop into a success the worst possible outcomes can be evaded.

There are two common options which can be useful for coping with self-employed debt. Firstly, the Individual Voluntary Agreement is a way of addressing debts within a legal framework. Secondly, a Debt Management Plan is a more informal method of proceeding to deal with creditors. Knowing which approach is most appropriate takes a degree of experience and expertise.

Some self-employed workers get too accustomed to doing everything themselves. When times are hard, trying to sort out complex financial matters solo can be a big mistake. Many debt services are not set up to help the self-employed, so it is imperative for them to locate companies with the capacity to do so.

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Business debt in uncertain economic times

Monday, October 24th, 2011

The amount of profit a company can make is dependent on a variety of disparate factors. It is always misleading to see business success as simply the consequence of things occurring within the firm. In times of economic turbulence, the truth that business progress is often connected with external conditions is underlined.

At Cooper Matthews, we appreciate that the UK economy has endured a difficult summer. Confidence has taken a knock and an unstable international economic situation has added to the gloom. It is not surprising that many small firms have found themselves struggling through no fault of their own.

A company cash flow problem can arise in a diversity of ways. When times are good, it might be the consequence of the illness of an important manager. During periods of low growth, it might be that a big supplier goes into administration. Sometimes, a company financial difficulty develops simply because consumers are spending less than normal.

In recent months, many British consumers have been either unable or unwilling to buy large items. Inflation has been higher than the average increase in wages, while some people are concerned about potential unemployment. Those with savings may have been alarmed by the volatility of the stock market.

Having a good appreciation of the fact that being in debt is not often due to personal shortcomings enables directors to seek specialist help and make progress in the correct frame of mind. If the internal workings of firms were generally responsible, there would be a much looser relationship between business failures and the trajectory of the wider economy.

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Serious business debt need not mean the end

Friday, October 21st, 2011

When a business has accumulated a lot of debt it is easy to let gloom dominate thinking. However, even if a business is struggling to deal with its debts and its prospects are poor there remain options. As long as specialist advice is sought, debts need not necessarily spell the end of a business which has some possibility of better prospects down the track.

At Cooper Matthews we have the experience and expertise which can make a difference to firms which are going through exceptionally tough times. A distressed company might have to close, but sometimes a new company which does similar things can take its place. A director of the old company might be able to be a director in the new one, as long as they have not become bankrupt and as long as relevant regulations are respected.

The regulations governing companies which imitate a phoenix have been tightened in 2011. This was to ensure that creditors received fair treatment. There had been worries that assets could be passed from the old company to the new phoenixing company at below an appropriate price. A regulation has been introduced which means that it is only possible to make a phoenix business after a three day notice period has elapsed. Administrators must also give an assurance that assets were not sold too cheaply.

Adhering to the regulations independently is beyond the capacity of distressed companies. They need the assistance of specialists who can guide them through the complex process safely.

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Monitoring and prompt action works

Tuesday, October 18th, 2011

When a business is in a degree of trouble, it can distract those responsible for it from being vigilant. Sometimes individuals react to mounting pressure by working harder instead of working smarter. They can suffer from serious stress and may be very reluctant to talk about their difficulties. Such a response is understandable, but it is not the most effective way of turning things around.

At Cooper Matthews we have a lot of experience and know those directors who seek assistance from business debt services relatively early give themselves and their firms a better chance of coping than those who procrastinate.

It is not easy to be calm when the loss of a business is a possibility. Years of hard work are at stake. It is also common to deny the reality of the situation. It is hard to accept that something which might have been a brilliant idea might not have proven to be quite so brilliant in practice.

If action is taken in good time then salvaging the situation is more likely than if debts are permitted to stack up for whatever reason. It is critical to be decisive. By getting the right help at the right time, company recovery may be on the cards. Avoiding a winding up order may be the first step in the road back to eventual prosperity.

Many now successful firms have flirted with disaster. It is imperative not to be fatalistic or deluded when times are very tough. It can be tricky to do the right thing, but not doing it usually has worse consequences.

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Disentangling complex financial webs

Saturday, October 15th, 2011

Even quite a small company can engage in quite complex financial deals. That is one reason why business debt services operate from a more difficult starting point that those services which assist individuals with debt problems. Furthermore, company directors can also have personal debt issues, if they have got loans secured on their property. It all means that there can be a lot of technical work for an insolvency specialist to perform.

At Cooper Matthews we are well accustomed to coping with complexity. This means that there is no need for a firm to panic if its affairs are somewhat muddled. Moreover, our expertise means that we can work out the best ways of protecting directors and the organisation from suboptimal outcomes.

A business cash flow problem can arise from a diversity of sources. It might develop because other firms make late payments. It could be the consequence of the termination of a large contract. It could be that a director has a protracted period of enforced absence. Or it might be that a big supplier goes to the wall. However, in many cases problems stem from more than one thing going wrong at once.

Working out the best way to address a company cash flow problem can be a time-consuming and painstaking activity. It takes patience, experience and skill. If a business is going through a very tough period it is most likely to have a better future if it seeks out specialist assistance from an organisation with the right blend of qualities.

business debt services, business cash flow problem, company cash flow problem

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A summer of stagnation

Wednesday, October 12th, 2011

A recent survey by Markit has indicated that the British service sector had a very poor August. Its performance slowed at a rate not witnessed for about a decade. Meanwhile, figures compiled by the British Retail Consortium suggested that there has been a 0.6 decline in retail sales. Growth forecasts have been trimmed by a range of institutions including the IMF.

At Cooper Matthews we understand that trading conditions are very difficult at the moment. Understanding the context enables us to deliver advice and solutions which have the capacity to deliver the goods.

While economists are divided about the best way forward, many UK companies have been having a very difficult time. Even if a further round of quantitative easing is introduced, it will take time to have a positive effect. Nor would any reduction in taxation be likely to have a significant stimulating effect in the short term. Those companies which have racked up business debt should know they are far from alone.

Business financial problems are a bit like those affecting the economy as a whole in that they are not amenable to quick fixes. Nonetheless, company debt problems can be dealt with efficiently if one uses an experienced insolvency practitioner. They have the capacity to analyse the situation and can help a firm with the solution that is most appropriate to its needs.

Part of keeping afloat in difficult times comes down to attitude. Perceiving that there are many other good companies in similarly awkward spots can help in the cultivation of a determined mindset.

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UK growth is likely to remain weak

Sunday, October 9th, 2011

The Organisation of Economic Cooperation and Development (OECD) are usually upbeat about the prospects of its member economies. However, they have recently predicted negative growth in Germany and no growth in Japan. With regard to the British economy, they have suggested that outright recession will be avoided in the next few months. Nonetheless, they make clear that the lacklustre recovery is likely to continue to grind on in its unimpressive way.

At Cooper Matthews we appreciate that the next few months are likely to be tough for a diversity of small and medium-sized businesses. Obviously they do not have the protective resources of large corporations and find it harder to get credit from the banks. However, if a small concern does build up significant business debt in these terms it is not necessarily the end of the road.

A business cash flow problem does not mean that a company cannot hope to be a viable concern in the future. It is a sign that something has gone wrong, but it is not evidence that the failure is permanent. The difficulty may have arisen in a plethora of diverse ways. If a calm head is retained and the correct assistance sought, the unfortunate situation may well be sorted out and creditors appeased.

Any solution has to fit the nature of the circumstances in which the distressed business is in. Analysis is necessary to explore the various alternatives. Sometimes, there are more options than others. In certain cases, a time to pay arrangement will do the trick.

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No change of course from the European Central Bank

Thursday, October 6th, 2011

Despite the apparent slowdown in the European economies, neither the European Central Bank nor the Bank of England adjusted their interest rates in September. The official interest rates were low in any regard, set at 1.5 per cent and 0.5 per cent respectively. However, neither financial institution seems to be responding to the deterioration in the global economy. The ongoing crisis in the Euro area is of particular concern and if the worst possible scenario occurred the British economy could not escape from the contagion.

At Cooper Matthews we recognise that company performance is often dependent on trends in the wider economy. In our long experience, excess business debt rarely flows from miscalculations made within a company. The norm is for the problems to emerge from the context, making decision making inherently problematic at the level of the distressed firm.

Economic events at different geographical scales can have a major impact on the fortunes of a company. The fact that the Euro area may be sleepwalking towards a recession may have unfortunate consequences for a range of British firms. It is important that the authorities which are dealing with the troubles in mainland Europe begin to act more cohesively than they have in the recent past.

The European Central Bank has traditionally prioritised fighting inflation instead of stimulating economies. If it continues with this stance and the performances of economies worsen, there is more chance that a company cash flow problem will become even more common. It should be remembered that a cash flow difficulty does not necessarily mean that company insolvency is on the cards.

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Business debt services can help with the debts of directors

Monday, October 3rd, 2011

Sometimes a director gets credit for a firm by offering a personal guarantee. Provided a business goes well, this does not constitute a problem. However, if the business is the major source of wealth for a director then the liability issue can cause stress and hardship. Business financial problems can become acute personal financial concerns.

At Cooper Matthews we know how difficult it is for individuals who have given there all to make their business work. When company debt problems become more than just a company issue, it is understandable for despair to creep in. Nevertheless, there are options out there which can limit the damage.

When a business folds and when a personal guarantee has been given, a creditor will want what they are due. To give them what they want, a director may choose between a debt management plan, a consolidation loan, an Individual Voluntary Agreement (IVA) and bankruptcy. Each solution has its conditions, good points, and bad points. Hence the options require careful consideration and consulting with experts makes a lot of sense.

For example, bankruptcy can be suitable for some individuals, but it limits the capacity of the individual to do as they please in the future. It is also the case that it is necessary to pay fees in order to go bankrupt. Some people may wish to avoid the unfortunate and unfair stigma which is still sometimes attached to bankruptcy in Britain. While bankruptcy has an appeal in that it seems to cut short the discomfort, it is something of an option of last resort.

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