Updated: 11th February 2020
My company cannot pay my staff/employees - what options do I have
Being unable to meet your payroll obligations is a serious issue, but one that can be overcome with access to reliable information and good contacts within the finance industry. The fact is that you may just be experiencing temporary cash flow problems that can be rectified with a new source of finance.
In this respect, various options exist to provide the cash you need to pay your employees. Whether any of the following would be suitable depends on the type of business you run, and how it is set up.
Owning one or more ‘hard assets’ puts you in a good position to obtain valuable financing. Leveraging the value of your business assets allows you to retain their full use, whilst attracting a lump sum of cash that can be used to meet your payroll obligations for some time.
If your company has a reliable customer base with few bad debts, invoice finance could be the answer to your cash flow problems, both now and in the longer term. You have a choice of retaining control of your own sales ledger with invoice discounting, or allowing the finance company to deal with collecting payment via a factoring arrangement.
Either way, your business receives a cash input every time a sales invoice is issued, enabling greater control of cash throughout each month.
If an insolvency practitioner believes that your company could be made profitable again, a Company Voluntary Arrangement may be the answer. It stops all legal action by creditors, and incorporates other debts into a single repayment each month.
To find out more about your choices in this situation, call the Begbies Traynor team for a same-day consultation. We can explain each option in more detail, and ensure that you make the right move to get your business back on track.