Don’t be afraid to seek help to weather the financial storm - Ainslie Benzie

By Ainslie Benzie
Published 10th Jul 2023, 07:00 BST
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How can businesses navigate through challenging financial times? It’s a perfect storm right now, but there are steps to identify and address key issues within your business.

Why is it so tough for businesses right now?

Businesses are still recovering from the challenges that came with Covid, and now face rising interest rates, high inflation, increased fuel prices, and labour and supply chain issues following Brexit. The reality hits when you consider that Scotland recorded a 150 per cent increase in liquidations in 2022 compared to 2019.

Is your business under financial strain?

Ainslie Benzie is Legal Director, TLT LLPAinslie Benzie is Legal Director, TLT LLP
Ainslie Benzie is Legal Director, TLT LLP

The first thing any business should do is assess its current financial position and prospective cash flow. This is particularly important for limited companies because directors have statutory duties which will change if the company is (or might be) insolvent.

Common red flags include:

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  • the relevant sector experiencing distress;
  • suppliers failing;
  • non-payment or delayed payment by debtors;
  • unexpected resignations or low staff morale;