Small Business or Sole Trader Debt

The danger of Insolvency for small businesses

Limited companies, small business or sole traders experiencing debt problems please contact us on 0800 074 6918 or complete the Limited Companies Enquiry Form

Many small businesses operate on a very tight budget therefore cash flow is an issue that need to be kept aware of every day. Money Advice Direct, since its launch, has assisted over that 50,000 companies and self-employed people through the minefield of liquidation and bankruptcy. If you or your business are worried about the possibility of Small Business or Sole Trader Debt then please feel free to contact the small business department at Money Advice Direct.

If you cannot pay your business debts when they become due, or if the assets of your business are less than your debts, your business is insolvent. Unless you pay those small business or sole trader debts quickly, then the insolvency can lead to bankruptcy or winding up. Bankruptcy applies to individuals, small business or sole trader and those that have given personal guarantees for loans. Winding up and liquidation apply to companies. Becoming bankrupt may involve restrictions, but the situation is less onerous for individuals whose small businesses or sole traderships that have failed through no fault of their own. Most are discharged from the bankruptcy process within 12 months although there can be longer term effects on their credit rating.

Our dedicated team of advisers

The need for debt advice for small businesses has never before been in such demand. Money Advice Direct has a dedicated team of advisers working in the business debt advice team advising limited companies, small businesses and sole traders on debt problems. The advisers have many years of experience in dealing with commercial debt and small business and sole trader insolvency problems. The team are readily available to provide detailed debt advice in confidence.

Many callers to the helpline are limited companies, small businesses and sole traders who have quite literally 'fallen in love'" with their businesses and are so blinded by love that they fail to realise the growing debt problems right in front of their eyes. Some businesses are so loss making that they are only surviving because the owners are using personal credit cards and loans to prop their businesses up. Unfortunately many small business or sole traders are so used to being their own boss that they would rather be in debt running their own business than work for someone else.

The money advice team's job is to identify the most appropriate insolvency procedure achieve the best result for the small business, sole trader or company director. The advice team take a very proactive approach. To do this we ask the business owners what they want to achieve. Some want a fresh start in business, some want to go back in to employment, some want to retire and some want to save their businesses.

The main insolvency procedures are the following:

	Company	Individual
Solvent winding up	Members' Voluntary Liquidation Striking off Procedure	N/A
Insolvent winding up	Creditors Voluntary Liquidation Compulsory Liquidation	Bankruptcy Individual Voluntary Arrangement
Turnaround procedures to save the business	Company Voluntary Arrangement Administration	Individual Voluntary Arrangement
Unsecured debt recovery	Compulsory Liquidation	Bankruptcy
Secured debt recovery	Receivership	Receivership

Being a small business or sole trader is the most simple way to start a business. All you need to do is registered as being self employed and attained the relevant licences trading can begin. Debt is a very common dilemma with limited companies, small businesses and sole trader. The debt problems to such an extent that Money Advice Direct receives over 1000 calls a week from small businesses and sole traders who are in debt. The problems is that being a small business or sole trader you can face debt problems if you do not concentrate on collecting book debts or making sure that cash flow is positive. If you are a Small Businesses or Sole Traders Facing Debt then you need to call the debt advice Line for Limited Companies, Small Businesses and Sole Traders as soon as possible.

Reasons why limited companies, small business or sole traders fail.

• Lack of cash
• Not researching the area of business in enough detail
• High "cash burn" rate
• Lack of management accounting experience
• Failure to pay taxes such VAT, Corporation tax and Income tax
• Over trading.
• Not responding to what competitors are offering
• Low investment or being under capitalised
• Keeping too much stock

If you are a small business or sole trader and are suffering from debt problems please call 0800 074 6918 and speak to a member of the advice team. You or your company can receive simple advice from the trained advisers on debt problems. The small Business team are experts in solving small business and sole trader debt problems. The will take as much time as is available to find the best remedy available.

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