A North East insolvency expert is urging the region’s company directors to make use of the final month of the Government’s furlough scheme to plan for the future.
Alexandra Withers, who is North East chair of insolvency and restructuring trade body R3, is calling on regional business owners and 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.
And she is also urging them not to ignore any signs of business distress that their businesses might be showing in the hope that they will simply go away.
Alexandra Withers, who is an associate solicitor in the insolvency department of Short Richardson & Forth Solicitors in Newcastle, says: “Directors only have another 30 days during which the 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.
“It’s very hard to admit that your business is struggling, but starting the conversation as early as possible will mean you have more potential solutions available, and more time to make a decision about how you move forward.
“Signs of business distress are things are quite common among businesses that are struggling – things like problems paying wages, issues paying suppliers on time, or problems with cashflow.
“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 is downloadable from its website and which explains the common signs of business distress, as well as the full range of restructuring and insolvency options that are available to businesses that are experiencing it.
Alexandra Withers continues: “The pandemic has disrupted trading for almost 18 months – it has 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 therefore 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.
“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.”