In times of financial difficulty, seeking the right advice not only helps you to make the right decisions for your business, but it also eases the stress of handling the situation alone. As a company director, it is your responsibility to seek advice should your company face insolvency.
Arranging an insolvency consultation does not mean your business will go into liquidation, it is an opportunity for you to receive comprehensive advice on the options available. As an experienced insolvency practitioner, I’ve conducted many consultations with company directors. This guide aims to ease some of the stress, so you know what to expect from your insolvency practitioner and what they expect from you.

When to seek insolvency advice

It’s recommended to seek advice as soon as possible when financial issues arise. Building up debts can result in action from your creditors and limit your options moving forward, but early action provides more opportunities to restructure debts, improve cash flow or rescue the business before the situation becomes more serious.

How can an insolvency consultation aid my business?

As mentioned above, an insolvency practitioner can help to explain the potential options available before formal insolvency. They can help you to understand your company’s financial position by discussing your debts, cash flow and creditor pressure to assess whether the business may be able to recover through informal measures or whether a formal rescue or insolvency procedure should be considered.
Depending on your company’s circumstances, potential options may include:

• Informal repayment arrangements with creditors, such as revised payment terms or a structured repayment plan.
• Company Administration.
• A Company Voluntary Arrangement (CVA).
• Company closure options.

More information on options for struggling businesses can be found in our article: Rising Costs and Can’t Pay Debts – Options for Small Business Owners

What happens in a consultation?

During a consultation, you’ll speak to an insolvency practitioner about your company’s financial circumstances, including cash flow, existing debts, upcoming payments, accounts, loans and contracts. In this discussion, the practitioner’s goal is to gain a comprehensive understanding of your business’s situation so they can provide informed advice on the options available. Some topics your consultation may cover include:

• Current debts and creditors, including any legal action taken by creditors.
• Cash flow and trading performance, including upcoming income and future contracts.
• Company assets, such as property, equipment, stock and money owed to the business.
• Personal guarantees and director loan accounts.
• Tax liabilities, including any outstanding amounts owed to HMRC.

Learn more about an insolvency practitioner’s role and duties in our article: What is an Insolvency Practitioner?

What to bring to your consultation

Bringing relevant financial information can help the Insolvency Practitioner understand your company’s position more quickly and provide more informed advice. Useful documents may include:

• Recent company accounts and management figures.
• Cash-flow forecasts and bank statements.
• A list of creditors and amounts owed.
• Details of any overdue tax liabilities or correspondence from HMRC.
• Information on company assets, including property, equipment and stock.
• Details of loans, finance agreements and any personal guarantees.
• Information on director loan accounts.
• Copies of any statutory demands, court documents or creditor correspondence.
• Details of major contracts with expected income and upcoming payments.

You do not necessarily need to have every document available before seeking advice. If your practitioner needs a document you haven’t provided, they’ll let you know.

What happens after your consultation

After your consultation, the practitioner should explain all the options they believe are appropriate.
At Revive Business Recovery, your initial consultation is free and there is no obligation to proceed with any of the options discussed. Depending on what you have provided and your circumstances, you may be asked to provide further information before a recommendation can be finalised.
If you choose to proceed with any of the recommended options, the practitioner will explain the next steps, what is required from you and any costs involved. Seeking advice is a positive step for your business, and acting early can help keep more options available.

If your business is struggling with its financial circumstances, arrange a free consultation with Revive Business Recovery to explore your options.