A significant part of business insolvency advice given to entrepreneurs is diversifying their investments. The owner must diversify the investments in finance, resources, marketing, and other business activities to safeguard the business from losses and misfortunes.
Business insolvency advice is helpful for small business owners.
Business insolvency advice can be helpful for the small business owner who feels the banks have ignored his concerns. Where a small business owner has taken on debt and is experiencing difficulties in repaying it, he may find that his bankers are not so much interested in helping him as in simply getting their money back. In such situations, the small business owner should seek business insolvency advice from an insolvency practitioner.
The first thing that the insolvency practitioner will do is investigate the company’s financial affairs and determine whether there are any sources of funds that could be used to pay down debt or improve liquidity. He may also recommend strategies to reduce expenditure within the company and increase cash flow.
In some cases, it may be possible to negotiate with creditors to accept a partial payment and write off the balance or allow more repayment time. This can be done through a formal arrangement is known as Company Voluntary Arrangement (CVA), supervised by an insolvency practitioner acting as a nominee. The nominee will prepare a report for creditors outlining the terms of the arrangement and inviting them to vote on its acceptance. If 75% of creditors voting by value approve the arrangement, it becomes binding on all creditors.