The chair of insolvency and restructuring trade body R3 in Wales is urging the country’s directors to make use of the final month of the Government’s furlough scheme to plan for the future.
Philip Winterborne, who is a Partner at Temple Bright Solicitors, is calling on company directors in Wales to use September to review their businesses and seek advice about the options open to them to address any impending financial issues they may be facing.
“Directors have another 30 days where the Government will effectively underwrite a large percentage of their wage bill, and they need to use this time to identify any financial issues their business may face and explore their options for resolving them,” he said.
“It’s very hard to admit your business is struggling. But starting the conversation as early as possible will mean you have more potential solutions open to you, and more time to make a decision about how you move forward.”
“The most critical thing company directors in Wales need to be aware of are signs their business is in distress, and not to ignore them if they present themselves,” Philip added.
“Signs of business distress include problems paying wages, issues paying suppliers on time, or other problems with cashflow.
“The directors of any Welsh firm experiencing any of these should seek advice from a qualified source about how to resolve the situation.”
Solutions for these kinds of problems can often be as simple as refinancing or consolidating the company’s debt.
But it is critical is that these options are explored before the issue spirals into something much more serious.
R3 has developed a free guide for company directors, which explains the common signs of business distress and the full range of restructuring and insolvency options that are available to businesses that are experiencing it.
Philip continued:
“We developed this guide to give company directors all the information they need to identify the signs of business distress and so they can seek appropriate and timely advice to understand the options that are open to address them.
“The pandemic has disrupted trading for nearly a year and a half and forced around 1.6m businesses to borrow more than £79bn from the government – and at the peak of the pandemic, furlough nearly nine million staff. These are far from normal times.
“We know there are many directors who are worried about the future and unsure what to do if their business is struggling.
“We hope they will use this guide to get a clearer understanding of the warning signs, what they can do to turn it around, and where they can get the help they need to do it.”
Latest figures from HM Treasury published at the end of July showed that 1.9million people remained on furlough.
The furlough scheme is due to end on 30 September 2021.
