An insolvency expert from Yorkshire is urging the region’s directors to make use of the final month of the Government’s furlough scheme to plan for the future.
Eleanor Temple (pictured), chair of insolvency and restructuring trade body R3 in Yorkshire and a barrister at Kings Chambers in Leeds, is calling on the region’s company directors to use September to review their businesses and to seek advice about the options open to them to address any financial issues they may be facing.
“Directors have another 30 days where Government will effectively underwrite a large percentage of their wage bill, and they need to use this time to identify any financial issues their business may face and explore their options for resolving them,” she 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 you move forward.”
The most critical thing company directors need to be aware of, Ms Temple said, was signs their business was in distress, and not ignore them if they presented themselves.
“Signs of business distress are quite common among businesses that are struggling – things like problems paying wages, issues paying suppliers on time, or problems with cashflow,” she said.
“Any firm experiencing any of these could well be facing financial issues, and its directors need to seek advice from a qualified source about how to resolve the situation.
“Solutions for these kinds of problems can often be as simple as refinancing or consolidating the company’s debt, but what’s really critical is that these options are explored 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 that are available to businesses that are experiencing it.
Ms Temple continued: “We developed this guide to give company directors all the information they need to identify the signs of business distress, and so they can understand the options that are open to address it.
“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, and we hope they’ll use this guide to get a clearer understanding of whether their business is struggling, what they can do to turn it around, and where they can get the help they need to do it.”
To download a copy of R3’s guide, visit www.backtobusinessuk.com