Four Solutions for Businesses Experiencing Financial Difficulties

Anyone that owns a business can experience financial difficulties, especially if there is a downturn in the economy. Instead of risking your business to bankruptcy, seek professional help in making it financially solvent again. Here are some solutions to keep the doors of your business open to clients.

Business Restructuring

If your business is having financial or operational issues, then you may want to consider restructuring it. A professional business recovery service will usually examine how to increase sales, reduce costs, or consider merging or acquiring another company to make your company solvent again.

If the business is restructured financially, then it maximises its available working capital. If it is restructured operationally, then more efficient ways for running the company are sought and discussed before the changes are made.

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Company Voluntary Arrangement

If a company is experiencing a problem, such as the proprietor being ill or a bad debt problem, then they can enter a Company Voluntary Arrangement, CVA, to resolve the issue. A company that provides business recovery solutions can meet with the directors of the company to reach the best CVA agreement.

Then, they will meet with the company’s creditors to try to get them to agree to the CVA. The company should be able to prove that their situation isn’t normal and that they can pay off their debts. One of the advantages to a CVA is that the business doesn’t need to advertise the proposal or its approval, so that there is no adverse publicity for them.

HMRC Time to Pay Agreements

If your business has some bad debts, but is otherwise solvent with good cash flow, a business recovery company may suggest trying to get your creditors to agree to a “Time to Pay” agreement. This agreement allows your company extra time to repay debts within terms. It should be proposed before creditors take legal action.

Among the benefits of this type of agreement is that it is an informal agreement, so it shouldn’t affect the company’s credit rating. Also, legal action can be avoided by openly communicating with their creditors and getting them to accept the agreement.


If your company is solvent with good cash flow, liquidating it should be a last resort. However, if the company has come to the end of its useful life, then selling it off may be a good way to repay your creditors. Consult with business recovery professionals before taking this step.

There are several other solutions to financial problems with a business, but these are among the best for allowing the business to keep its doors open. Other solutions could lead to closing the business and selling it off to pay its debts, but those should be considered as a last resort.

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