KSA Group

Cash flow, put simply, is the movement of money, in to and out of a company’s bank accounts. When cash flow is ‘good’, it means there is enough money coming in to cover the money going out. It is when there is not enough money coming in to cover the cash required to pay for outgoings, 'poor cash flow' that you should start worrying − even profitable companies can experience cash flow problems (see the video below).

Warning signs of a struggling business
If you recognise too many of the following signs, then it is likely that your business is under pressure, at risk, or it could be be insolvent.
Signs regarding the bank:
Your overdraft is always at the limit
Your bank always request more information
Your bank has returned cheques
Your bank has refused to increase your overdraft
Your bank refuses to provide a Loan
Your bank has refused to provide an Enterprise Financial Guarantee loan
Your bank has asked for facilities to be reduced
Your bank wants to introduce investigating accountants
Your bank wants personal guarantees
Your bank asks for increased security and/or personal guarantees

If a company goes into liquidation then its assets, for instance, property and stock, are "liquidated" or turned into cash for the creditors of the company. There are three types of liquidation
Creditors Voluntary Liquidation
Compulsory Liquidation
Members Voluntary Liquidation (cash is returned to the members as the company is solvent )

Coronavirus (COVID-19) has meant that the Government banks and other organisations are having to act quickly to offer help and support to companies and businesses affected. The government shut down of whole sectors of the economy is having a profound impact.

Will I be able to pay back my government backed loans?
Will the bank call in my loans?
Poor cashflow?
What a personal guarantee means for you
What will HMRC do?
How will Corona Virus affect us? ( see our page here )
Employment compliance and pensions
Marketing and product/ service delivery
Producing meaningful management accounts on time
Keeping up to date with tax reporting and legislation change and filing annual accounts or tax returns
Dealing with banks investors, online lenders, raising working capital
Leasing or renting property
How to pay HMRC
How to win new work
How to pay wages on pay day
Wrongful trading or being made personally liable for company debts
Suffering from stress or losing your property because of a badly performing business

Usually it is pressure in the form of cash flow problems. Running a business is not an easy thing to do, being a director of a limited liability company, partner or member of a LLP can be a lonely place.
You may be really good at running a business in the good times. But no one has trained you or your fellow managers for difficult times and nothing except experience prepares you for when the pressure starts to build.
What kind of pressure can you face running a business? There are lots of pressures but the one that usually worries people the most is simply cash flow pressure, or the lack of cash to be precise.

Since the Covid-19 Pandemic struck many business are struggling. We have created a help page here that sets out the various help packages in place. Once trading starts to return to normal in the wider economy you may still find that your business does not benefit and the issue of cashflow and debts mount up. Read on if you think this may be an issue for you.
You can get lots of help right here! We are here to help you take back control of your business and ensure that you put worry behind you.

When closing down your limited company, there are various options you can take, depending on your company's financial state. Firstly, you need to ensure you have some funds as trading debts will need paying. These include:
Final corporation tax and VAT payments
Final accounting fees
Bank loans and overdrafts
Any money owed to shareholders or directors
Any remaining accounts owed to trade suppliers
Any outstanding payments of PAYE and National Insurance on the payroll
Any ongoing commitments, including hire purchase or lease agreements

KSA Group, who own this site, will help you to fix problems in your business. We won't charge for any initial advice or face to face meetings. We speak in English. We will save you money and your precious time. However, we do advise that you have a look through our guides and options so you can have an idea about what is possible for you, given your current situation.
When you call our freephone number 0800 9700539 you will quickly speak to someone who wants to help you, not criticise you. We help people like you every day - imagine how you will feel when we start to lift the load off your shoulders?

Finding it difficult to raise finance as your company is in a CVA? Don’t know where to start looking? Use a regulated, expert finance broker to find it for you, for free! Your company may be busy and growing, but finding funding to ensure you safely continue to grow is tough, especially when your business is in a company voluntary arrangement. As you know your company has no credit rating because it is trading in a CVA. Very few banks or lenders will support your growth plans. It can be the most frustrating part of voluntary arrangements - no credit rating equals limited funding facilities. This can prevent you from growing your business. Company Funding Options (CFO) is a FCA regulated commercial finance broker with deep roots in turnaround and insolvency, because our sister company KSA Group has written and overseen more CVAs than any other UK firm in the last 20 years. Over that time, we too became frustrated with the lack of funding for our great clients. So, our directors formed CFO to help find the best products for all CVA companies. Then we got full authorisation from the Financial Conduct Authority to ensure CFO is compliant with strict laws on broking and lending. CFO aren’t lenders but know where to find the best funding for your business. If you need funding, you will certainly benefit from a call with our team and it will usually cost you nothing to raise your new finance, as we are paid by the lenders! With recovery from Covid leading to increased trade, you need to ensure you have enough working capital to meet the CVA payments AND to grow. A tough balance to achieve, but a problem we’re well used to helping with. Speak to experts now, free of charge, we can quickly assess what type of funding you can obtain. You’ve nothing to lose but the price of a call. But if you become a client of CFO your business will have finance experts on your side to raise new funding.

Voluntary liquidation is an effective way to close an insolvent business. The costs of liquidation can put directors off but not doing anything is likely to cost you more in the long run!
The cost of liquidation depends on the complexity of the case. This is based on factors such as;

Whether the company is trading or not.
Number of employees
Number of creditors, and how much it owes them
Value of its assets, including money it is owed by debtors
Director and shareholder profile
The quality of the financial information available.

Generally, the costs start at around £3500 + VAT. This would be for liquidating a company with a single creditor, such as having an unpaid Bounce Back Loan (BBL) or HMRC. For more than one creditor issue, we would expect the fee to be approximately £3,750-4,000 plus VAT. For more complex issues including companies who have landlords, employees, BBLs and supplier debts we will provide a written quote after our meeting with the directors to discuss the company’s options. Do get in touch to discuss your company’s liquidation, don’t delay and hope the problem will go away!

A bounce-back loan is a loan offered by the Government amid the Coronavirus pandemic, to help small businesses gain access to fast track, ‘emergency’ finance, borrowing between £2,000 and £50,000. You may use the loan to pay staff wages, directors included. It can also be used to help with rents and business rates, any monthly business costs or overheads such as phone and electricity bills. Finally, directors may wish to use it to refinance other business debts to lower the interest costs related. The loans are interest-free for the first 12 months and then have a 100% Government-backed guarantee for lenders. Once the eighteen months are up, there is an interest rate of 2.5 per cent per year and repayments can be stretched for up to 10 years.

Our firm advice is this. DO NOT run down the bounce back loan cash until there is nothing left to pay creditors, wages or the cost of liquidation.

Why might you have been served a winding-up petition and what happens now?

A winding up petition is a legal notice put forward to the court by a creditor. The creditor petitions to the court if they are owed more than £10,000 and it has not been paid for more than 21 days. The application, in effect, asks the court to liquidate the company as they believe the company is insolvent. Proceeds of the liquidation can be used to pay back creditors. HMRC issue about 60% of all the winding up petitions.

Once you have put your company into liquidation it is a chance to start again.

Remember that a failure of a limited company does not mean that you are a failure.

As long as you have not done anything fraudulent or have wilfully neglected or made the creditors situation worse you do not have much to worry about.
In a liquidation your staff (and this could include you) will be paid redundancy by the government.

Creditors Voluntary Liquidation (CVL) is a formal insolvency process when a liquidator ‘winds up’ a company’s affairs. It sells all of the insolvent businesses’ assets and the proceeds go to as many creditors as possible. The proceeds are distributed in order of priority. By the end of the liquidation process, the company is completely dissolved and struck off the Companies House register. The Insolvency Service will also investigate the conduct of the company''s directors. They will be looking for signs of wrongful or fraudulent trading.

Our team of professionals at KSA Group are all passionate about saving viable businesses and giving the best possible advice to directors, creditors and stakeholders in any insolvency situation. Many of our team have had direct personal experience of business distress and have felt that there are better ways to advise all those involved. Our team is headed up by Keith Steven, the managing director, Iain Campbell, the operations director, and our 2 licensed insolvency practitioners; Wayne Harrison and Eric Walls. Our corporate advisors have many years of experience of talking to and negotiating with creditors, including banks and HMRC. The regional managers have all held senior positions in companies and know how to help businesses in distress.

If your company has a turnover of more than £90,000 in any financial year then you must register for VAT. You will need to submit quarterly returns. Remember it is your responsibility to do this as a director not your accountant. Yes, they can do it for you but ultimately compliance is your responsibility. If you haven’t filed a return then HMRC can make a reasonable assessment and chase you for it.