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Bad Debts

Directors of Companies Facing Insolvency — The Four Deadly Sins

None of us like to think of our companies facing insolvency, but unfortunately that can be the reality of business, especially at the moment. Record numbers of business insolvencies are being recorded, so it’s vital for Directors to be clear what they should and shouldn’t do — preferably before they’re faced with the choices. What Is Insolvency? Section 123 of the Insolvency Act 1986 sets out variou
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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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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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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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Business Insolvencies Soared in May

There have been many signs recently that the economy is in trouble, most obviously the most recent announcement of interest rate rises. Another troubling sign, though, has been given less publicity — a sharp rise in business insolvencies in May. What’s behind this, and what does it mean for you as a business owner? The Rise in the Figures Business insolvency figures have been rising for a while, but it’s been possibl
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FCA Ban for Debt Packagers Charging Referral Fees

In these times of financial stress, large numbers of people, both consumers and small business owners, are seeking debt advice. A good deal of the advice out there is excellent, but there are exceptions. There’s been concern expressed for some time about the referral fees charged by debt packaging companies and whether this creates bad advice. It seems that the Financial Conduct Authority (FCA) share this concern, an
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Are We Producing a Financially Illiterate Generation?

While the current economic problems in the UK can’t really be laid at the feet of consumers, there’s no doubt that widespread poor financial management isn’t helping matters. This ranges from naivety in investment to a general “have it now, pay tomorrow” culture that’s fuelling debt. A recent survey suggests that this isn’t set to improve. The study, by Compare the Market and MyBnk, found that only 41% of young adult
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Administrations at Their Highest Since Before the Pandemic

During the Covid pandemic, surprisingly few companies went into administration. This was because a raft of government support measures, such as furlough and bounce-back loans, allowed struggling companies to survive. But this is over, now, and it’s showing, with new issues adding to the effect. The number of companies entering administration in March 2023 was the highest for three years. The Covid Effect on Administr
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