A North West insolvency expert is urging businesses to use the final month of the Government’s furlough scheme to plan for the future.
Allan Cadman, North West chair of insolvency and restructuring trade body R3, is calling on company directors to use September to review their businesses and address any financial issues they are facing.
“Directors have another 30 days where the Government will effectively underwrite a large percentage of their wage bill. They need to use this time to identify any financial issues their business may face and explore their options for resolving them,” he said.
“It’s very hard to admit your business is struggling, but starting the conversation as early as possible will mean you have more potential solutions open to you, and more time to make a decision about how to move forward.”
Allan said it was critical that directors were aware of signs of distress – such as difficulty paying wages, paying suppliers on time or problems with cashflow – and did not ignore them.
“Any firm experiencing any of these signs could well be facing financial issues, and its directors need to seek advice from a qualified source about how to resolve the situation. Solutions can often be as simple as refinancing or consolidating the company’s debt, but what’s really critical is that they explore the options before the issue spirals into something much more serious.”
R3 has developed a free guide for company directors, which explains the common signs of business distress and the full range of restructuring and insolvency options available.
Allan, who is also a partner at Poppleton & Appleby, added: “The pandemic has disrupted trading for nearly a year and a half, and forced around 1.6m businesses to borrow more than £79bn from the government and, at the peak of the pandemic, furlough nearly nine million staff, so these are far from normal times.
“We know there are a large number of directors who are worried about the future and unsure what to do if their business is struggling. We hope they’ll use this guide to get a clearer understanding of what they can do to turn it around, and where they can get help to do it.”
