As all those who are in business know loan companies have generally higher rates of interest and usually more stringent terms and conditions. They are also more likely to act quickly in recovery particularly when THEY BELIEVE YOUR COMPANY MAY BE EXPERIENCING financial problems.

Other lenders not tied directly to banks lend money for a wider variety of needs; sourcing their money from hedge funds and other non-mainstream sources thereby your company is usually paying very high interest rates.

Many of these alternative sources have a reputation of being absolutely ruthless in their pursuit of anyone falling behind.

Loan companies have higher rates of interest and usually more stringent terms and conditions. Businesses were encouraged to borrow from these other sources because they did not fit the criteria of the high street banks. Other lenders not tied directly to banks lend money for a wider variety of needs, sourcing their money from hedge funds and other non mainstream sources thereby your company is usually paying very high interest rates.

For this type of finance the lender will take direct charge on property, goods or other form of tangible asset to secure its money. Some may also seek a personal guarantee.

These are the sorts of loans that need swift action, as the lenders will not hesitate in the future climate to recover either the money or sell the assets with ruthless speed.

Whilst the reaction time of secured lenders tends to be slower than that of unsecured once they begin to act the costs associated with problems will rocket. It is not unusual to see a debt of £5/6000 attract costs before any court action of £1500 / £2000.

These are the sorts of loans that need swift action, as the lenders will not hesitate in the future climate to recover either the money or sell the assets with ruthless speed.

Prompt action, knowing who to talk to or communicate with is vital.

Items financed

As the economy starts to move again finance companies will ensure that they are at the front of the queue in respect of debt owed on equipment and items purchased on any form of credit. Which type of credit will depend on how we defend any actions to preserve the asset in your hands? The system allows for voluntary surrender but all avenues are open to keep you working if that is what you want to do. Even were an asset is on the face of it worth considerably more than any debt claimed by the time costs, punitive interest and seizure and sale are added there will be a debt still owing.

Vehicles

PCP (Personal Contract Purchase)

Some smaller businesses have used this form of purchase to obtain a vehicle/s for their companies. Whilst we cannot help individuals it may be possible for us to help companies who have used this form of agreement.

Leased Buy

Many companies use this facility offered by various finance house to purchase not only vehicles but also other items of equipment. The agreements tend to mean that more equity is retained which in turn gives more flexibility.

Leased Hire/purchase

Miss selling of Consumer Credit agreements for vehicle and equipment sales has again reared its ugly head. We will look carefully at agreements entered into to see if the company has been disadvantaged by the agreement.

Many businesses and in particular small and medium enterprises have been under pressure pre Covid19.

Whilst the government has cancelled the rates bill for 2020 to 2021 with no business rates to pay they have not put a moratorium on the collection of monies owed from before the March decision.

Many people still do not realise that the actual money collected by councils for Business Rates does not go to the council. They are the collection agent of central government and get paid for collecting the money and do not directly benefit from the sums collected. This is frequently reflected in their referencing any debt owed to one of the many bailiff collection companies who act in the collection of this type of debt

We can help with pre-Covid19 debt problems too.

Much has been made of the support offered by various larger concerns about assistance being offered to struggling businesses. As yet there has been no action in the areas of utilities and telecoms. Access to utilities is an absolute necessity for 90% of companies.

Renown for their intransigence on negotiating, any company using Electricity, Water, Gas, telecoms and Internet will know just how difficult they can be when debt exists and any disruption can be catastrophic.

We can help! Lets make sue we keep the lights on

Many people do not understand how much help is built into the system for companies facing action from bailiffs.

The anomaly of action based of the so-called power of bailiffs acting under a High Court writ is wide open to abuse. An action in court is under the costs threshold of £10,000, the transfer for a payment of £66 is an easy option for claimants.

We already are seeing threats of these actions multiplying as bigger concerns seek anyway they can to use your money to strengthen their balance sheet. The system is so flawed that many people who have heard nothing from the court regarding an alleged debt suddenly face up to the arrival of an enforcement officer on the doorstep when costs have already escalated by hundreds of pounds.

REMEMBER if he can’t collect he does not get paid!!

There is often evidence of these companies acting outside the law by ensuring that the initial letter which the law requires to be sent to a debtor getting “lost in the post’. DON’T be the latest victim of these unscrupulous actions.

See our section regarding the behaviour and record of the various firms in this sector.

With government intervention, extensive help has been offered in respect of mortgages, with payment holidays to both domestic and business mortgage customers. Many will have taken advantage of this ‘holiday, but we will be there to help in the coming storm after the government takes off the handcuffs preventing action against mortgage payers in arrears

Beware of companies, which ask lots of questions based on the supposed system they run to allow your payment holiday.

Ask if you need help and advice on the scheme.

Pre Covid 19 Debt (VAT, PAYE, SA, CT)

Post Covid 19 Debt (VAT, PAYE, SA, CT)

The real problems with HMRC will not be over the next few weeks but in the few months and years to come after the lockdown ceases. We need to prepare for this. In particular those with a debt that arose pre Covid 19 as the tax man will want his money back.

The sale of assess is used as a process by lenders to recover the money lent on items of business equipment. If an asset cannot be retained it is always better to sell the asset and give the money to the lender. Allowing them to take the asset is a way to ensure they soak up equity in a sale and ensure you still end up owing money.

We can advise on this.

There will be businesses that cannot avoid this final end. If we feel that is appropriate we will advise you what is the case.

BS4C Can Help

BS4C are Commercial Advisors from a wide range of Business Sectors who have experience helping Companies find Solutions with their Creditors.

Speak to one of our specialists about arranging an informal Company Restructuring Plan, helping you get back on track.

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