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What is Business Restructuring?
Too often, when Directors approach Insolvency Practitioners for help, their business is already well into its insolvency and the available options have already started to dwindle. While this doesn’t necessarily mean that liquidation is inevitable, the delay does make this more likely. However, many insolvent businesses are able to be saved by business restructuring, which as the name suggests, involves reviewing the business as a whole and looking for where efficiencies and savings can be made, in order to curb outgoings and return the business to viability.
Could Business Restructuring Work for you?
Most businesses will look for ways to maximise their profits by increasing income and reducing outgoings as a matter of course, but when this isn’t enough and the business, for whatever reason is unable to meet its debts when they fall due, there are additional options to save a business which is fundamentally viable, but currently insolvent and under pressure from creditors.
In particular, putting the company into administration put the business into the control of the administrators for a period and during the process of administration, the business will be protected from pressure and any threat of legal action from those to whom it owes money. This allows the business some breathing space to reorganise its affairs and once the period of administration is over, the company may well be in a stronger, more viable position and able to continue trading.
A Company Voluntary Arrangement (CVA) is another option for insolvent businesses. Just like Administration, this is a formal process, in this case an Insolvency Practitioner is appointed to arrange terms with the business’s creditors, usually to pay less, pay later, or write off debt entirely and if successful (75% or more agree), all creditors are bound by the CVA.
No matter which business restructuring option is suitable, it’s important to act fast once a company has become insolvent. The more time passes, the less likely it will be to save a company through business restructuring, increasing the chance that liquidation is the only remaining outcome. it has to be said, that even if this is the case, there are ways to make the outcome better.
Using Business Restructuring to make the savings which save your company
As Licensed Insolvency Practitioners, Lines Henry are not only able to make use of the solutions which are only available to those in our profession, but we also have decades of experience dealing with insolvencies o all kinds and can use this insight to see solutions and identify opportunities which might well allow business restructuring to succeed in your case and your specific circumstances.
Your first contact with us, in the form of a consultation, is completely free of charge, so there’s no reason not to contact us sooner rather than later, indeed, delaying is often likely to be more and more costly the longer you wait. We offer impartial advice, reassurance and direction, giving you certainty and moreover, making a stressful situation less so. Caught early enough, we can also help you begin a process which may well result in saving your business from liquidation.