Can’t Afford To Pay Employees?
Can’t afford to pay employees due to Coronavirus COVID-19 PANDEMIC? Covid19 pandemic has had a significant impact on peoples lives and businesses throughout the UK and the rest of the world.
HBG Advisory operates all meetings by video links, ensuring a faster response time for a free no-obligation first meeting. All parties remain safe and maintain confidentiality and privacy. It further impacts on the cost of conducting the Insolvency process, reducing travel time and associated costs.
For immediate response telephone, freephone: 0800 612 5448
When, as a director, you have no funds to pay employees, it is indeed stressful and affects both parties.
Employees usually rely on the company for income, as does your company depend on the employees to operate.
Not paying staff reflects a severe cash flow problem for the company.
Reasons why I am unable to pay my employees?
- Being unable to pay wages is lack of cash flow.
- May the problem be short term?
Notwithstanding, it may be a more significant issue?
- sales decline
- a bad debt,
- loss of a contract
- or slow-paying debtors.
Can’t Afford To Pay Employees? – So What Options Do I Have?
When a director of a limited company, you must make sure at all times you are not trading wh solvently. If your inability to pay employees is a short term issue and you can identify why and correct the cash flow, then excellent. Once you are assured, the business is a going concern then, consult HBG Advisory for assurances moving forward.
If your company has potential issues, it can’t resolve and drift into Insolvency; then you may need to cease trading to avoid trading while insolvent.
At this point, as a director, you need to seek protection and consult a Licensed Insolvency Practitioner at HBG Advisory.
If you consider the problem is short term only, then:
- Speak with the employees requesting extra time to pay. You need to be assured of your companies viability moving forward.
Apply For A Loan
As with above, you need assurance of your companies viability. Ensure any short gain by a loan, does not add to longterm debt which the company may fail to pay in the long run.
How Viable Is Your Business Plan?
If your business plan demonstrates robust growth with profit, a company may continue trading while paying its creditors.
Invoice financing applies to B2B type businesses. Known as Factoring. A business may raise finance based on the delivered value of it’s either singular or batched invoices. Helps when companies grow faster than cashflow.
Take care when considering this option, f sales are declining, then you may add to your operating costs.
What Else! If All Else Fails?
- Company Voluntary Arrangement (CVA)
- The business is not as viable as it was.
If confident your business has a future, but no ability to pay employees, then HBG Advisory can advise on your next move.
Contact: Jeff Jones on 0800 612 5448