At Salient Insolvency, we take insolvency seriously, especially given the latest figures the government has published on the number of insolvencies that have been processed in recent months. However, insolvency is not always as serious as business owners often imagine.
Of course, if you are up to your eyeballs in personal and business debt, then it can be an extremely worrying time. However, there are steps that you can take to put your finances on an even keel. The time to take action is before inflation really starts to bite, of course. Most economists now think double-digit inflation is going to be an established fact in the UK economy by the end of 2022. That’s quite sobering from the perspective of business and personal insolvency alike.
Like many other things in life, seeking help is the first step. Please bear in mind that we assist people across the UK. We carefully explain the options available to them even though they might be temporarily insolvent. Measures like company voluntary arrangements, business rescue services and bounce back loan renegotiations can all help with our professional assistance. In the case of individuals, personal debt support might mean consolidating debt or even seeking a debt relief order. We can help in these areas, too.
Of course, the sort of action that might be taken to overcome cash flow issues, bad debt and rising levels of indebtedness will differ from case to case. That’s why our tailored assistance is always preferable. Most insolvency professionals now think they are going to be very busy as more and more small enterprises and individuals seek guidance. That’s one of the reasons why the so-called cost of living crisis is now increasingly being understood as an impending insolvency crisis, too, in so many parts of the country.
Look at it this way – if one small company decides to close or mothball operations until commercial energy prices come down, then that could be several people being made redundant and numerous orders to suppliers that are no longer made. In turn, those former employees may struggle with mortgage payments and credit card debt leading to personal insolvency. A supplier that was just about managing with its current level of turnover could go under because one of its customers no longer places orders. Worse still, they might cease trading owing them outstanding sums for goods and services already rendered.
This means that even businesses that look solid at the moment are going to be in for a bumpy ride. Looking once more at the credit terms small businesses offer their clients is going to be a good way to stave off problems. Don’t just put your prices up justifying it through rising costs. Although this may be necessary at some point, right now your processes and procedures in all financial areas must be in order before the crisis deepens. If you currently have debt, then do everything in your power to pay it off as soon as you can. We can help you to do so without incurring penalties.
Remember that interest rates are on the rise and are likely to go higher unless and until inflation is brought under control within the UK economy. Of course, no one really knows how bad the insolvency crisis or inflation will get. All that individuals and small business owners can do for the time being is to prepare and seek our professional assistance if they think they’re getting into difficulty before they hit crisis mode.