2nd December 2020

Advice for businesses looking for turnaround finance and recovery support

Any business experiencing a downturn in their performance must remember that communication is a critical part of any survival strategy.

The two key organisations who normally push a business over the edge are HMRC and Funders. Both can have knee jerk reactions when they are not aware of what is going on or do not have reasoning behind missed payments or other surprises.

We've found that a lot of businesses think that seeking turnaround finance, or even asking for, help is an admission of failure and will have a negative impact on how people view them. It is not. We consider it a sign of strength and a genuine desire that owners want their business to survive.

There appears to be a perceived stigma with approaching an Insolvency or Turnaround Practitioner, however, these are the experts and are aware of the numerous options available to businesses and the appropriate people to talk to. The earlier their advice is sought then the easier it can be to structure a plan of recovery.

Having a plan is critical to any recovery process and we can't stress this enough that, identifying the problem early and even pre-empting a potential problem will enable the business to have more financial options open to them. If a lender or other parties can see that a plan has been put in place and it is achievable, whether this is a six month, 12 month or five year plan, they usually are more willing to work with a business throughout its turnaround and recovery process especially if it can be seen that expert advice has been sought.

When a business is talking to lenders, banks or any other finance providers to support a turnaround plan, it is vital that the company spokesperson does not hide anything and be as truthful as they can be about the business’s finances. Honesty about the business’s struggles and a robust turnaround plan gives the company creditability. It must also be realistic, never over promise because that can do more financial harm than good.

There are plenty of turnaround finance options available for businesses looking for recovery support. For example, at Optimum Finance, we have regularly worked with businesses and have leveraged additional money from the sales ledger to enable pressing creditor payments to be made, not only to buy more time, but also as a possible long term solution to their ongoing working capital needs.

An Insolvency Practitioner can identify the various appropriate funding support that is available. Essentially every lender wants to know how they will get their money back and/or see what security is available should the company not be able to pay later and the Practitioner will be able to marry the security available to maximise its value with the most appropriate type of lender or lenders.

Our key advice for any company is to talk to Turnaround and Insolvency Practitioners and not be scared of doing so because they are the experts and have the experience to advise, suggest and support the business properly. The earlier help is sought the easier it is to plan a future.

At Optimum Finance, we utilise innovative technology to offer a range of flexible funding solutions, which grow alongside your business. Get an instant estimate for the amount of funding you could access with our finance calculator. Products include invoice discounting and factoring that can boost your cashflow and give you access to a dedicated credit control team.

Email or call us to speak to our experienced team of experts and find out how invoice finance could help your business. We pride ourselves on getting things done quickly and providing access to cash within 24 hours of approval. We are passionate about finding solutions and delivering to clients’ needs.