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Before you borrow any money, you should ask yourself this crucial question:

Will you be putting good money after bad?

As Licensed Insolvency Practitioners, we have dealt with too many directors who didn’t ask themselves this question before getting additional funds. The result for some of them was that things got worse. Their company had been struggling so much that the new funds just delayed them having to close their company due to insolvency. Their business debts had got bigger and, in many cases, they had additional problems due to the personal guarantees which the directors had to take out to secure the new funding.

In many cases, the better option is to use a formal insolvency procedure to deal with the struggling company, and then put the new funds into a new company – one that is free from the historic business debts and onerous contracts.

Seek professional advice

This is a sensible and legal option in the right situations. However, it is important that you seek the advice of a Licensed Insolvency Practitioners to ensure that you are fulfilling your legal obligations as the director of a company.

A lot of companies do just need some additional funds to help them through a difficult period – the current Coronavirus pandemic being a prime example, although it remains to be seen how long this particular ‘difficult period’ is going to last.

If your answer to the question Will you be putting good money after bad? is that you are “not sure”, then you really should get professional advice before you agree to any new funding arrangements.

Our advice is free and confidential.

You really have nothing to lose and everything to gain.

For more information

Clarke Bell have been trading as Licensed Insolvency Practitioners for more than 25 years. So, we have the experience and expertise to help you determine whether you should be putting additional funds into your business.

We can introduce you to an independent finance brokerage firm who can help you get the right type of lending option from the best lender.

For your free expert advice 0161 907 404

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