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Insolvency & Cash Flow

Mixed Forecasts from London Businesses

After a year that’s been bad for both businesses and consumers, it might be assumed that business forecasts are going to be negative. However, a survey of London businesses late in 2023, gives mixed signals. Most expect difficult times in the first half of 2024 — but a surprisingly large number also expect to increase their profits this year. Fears for Economic Activity in 2024 In a survey of 500 London-based b
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Small Businesses Are Confident About 2024

The Federation of Small Businesses reported that, for the 4th quarter of 2023, 40% of small businesses reported a fall in revenue, and confidence had also plummeted. Which makes it more surprising that, according to research by three separate organisations, optimism is high among small businesses for 2024. Expectations for Growth in Turnover In a recent poll by lender Iwoca, 47% of small businesses were expecting an
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Are IVAs Being Mis-sold? The Insolvency Service Investigates

An IVA (individual voluntary agreement) can be an invaluable resource for any individual person facing mounting debt. It offers the chance to protect yourself against action by creditors, and to structure repayments in an affordable way. However, like any financial product, there’s the potential for abuse. The Insolvency Service has announced that it’s investigating whether IVAs are being mis-sold. What i
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Business Loans and Personal Guarantees

Loans can be essential for the growth of small businesses, and as long as they’re managed carefully, they’re entirely positive. Investing for growth is a way that SMEs can lead the economy out of its current stagnation — but there’s a problem. Banks are increasingly asking directors of small businesses to provide personal guarantees for loans, often putting their homes on the line. The Federation of
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Late Payments — What Difference Will the Autumn Statement Make?

Small businesses doing business with giant corporations have traditionally had no choice but to put up with accepting the customer’s payment terms — sometimes having to wait months before getting their money. This can leave their cashflow in a dangerous condition, even threatening their ability to continue trading. The Chancellor’s Autumn Statement, on 22nd November, addressed this issue. The measures he
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Director’s Loan Account — What Happens if the Company Is Liquidated

In my last post, I talked about the effect of liquidation on a company’s directors, mentioning that one potential problem arises if a director has a Director’s Loan Account with the company. So, what exactly is a Director’s Loan Account, and what are the dangers if the company is liquidated? What Is a Director’s Loan Account? A director is entitled to draw funds from the company as a loan, and
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Company Liquidation — How Does It Affect a Director?

In any time of economic uncertainty, there’s likely to be an increase in companies going into liquidation. The recent collapse of Wilko has focused our attention on this issue, and no doubt many company directors are feeling nervous. The position of a director of an insolvent company can be problematic in certain circumstances. In general, however, there shouldn’t be too much to worry about. Insolvency fo
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Pay Attention to a Company’s Cash Flow Before Making a Decision

There are various reasons why you might need to examine another company’s books. You should certainly do so if you’re considering investing in the business, but you may also want to get a better idea of their finances before offering credit. But what should you be looking for? Turnover? Profit? Or is it better to look at cash flow? Why Is Cash Flow Important? Profit and turnover each give only a very partial picture
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Good News and Bad News for International Business

During the pandemic, SMEs worldwide assumed this was as bad as it got, and by this time things would have improved. In fact, 2023 seems to be even worse than the height of lockdown — in fact, the worst the economy has been since 2008. Strangely, though, this doesn’t appear to be causing gloom among business owners. A recent survey suggested that the vast majority of SMEs in the international business community are op
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Are Supply-Chain Delays Killing Your Business?

Business owners generally focus most on the sales that bring in the income, rather than on their suppliers. That’s understandable, but it can also be short sighted. Recent research by retail bank Aldermore has found that well over half of SMEs have suffered supply-chain problems in the past year — and this has cost a total of £1.9 billion. Why Are There Supply Chain Delays? Disruptions to supply chains have been goin
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