In the current difficult business climate, many businesses will face cash flow difficulties brought about by the COVID 19 crisis. You may look to utilise some of the financing options that Government has facilitated to see you through these difficult times, We have summarised these options here.
If the business is encountering cash flow problems resulting from poor debtor payments, you are able to make an application to enter that debtor into business rescue. In our experience such an option, if commenced timeously, will almost always provide the creditors with a better dividend than through a liquidation. Equally, if your business is in trouble and needs “breathing space” and protection from your creditors, Business Rescue can be a powerful tool to provide you with a means to recover and thrive once more. We have posted a number of articles on this topic and Alexis or Dave are experts and able to consult with you on the options available.
Business Rescue has long been clouded in controversy ever since it was first introduced in the New Companies Act (2008), mainly as it was abused by businesses trying to avoid liabilities or entering at a time that was far too late to save the business. There are though some examples (including matters where we have acted as Business Rescue Practitioners) which have led to the restoration of businesses into thriving enterprises with payments to creditors having increased many times beyond what they would have been in a liquidation.
It also is a way of saving directors from potential personal liability for the company’s debts.
We look forward to helping you to thrive and standing by you in this extremely difficult business climate.