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Informal Turnaround

Informal turnaround involves reaching informal agreements with your company’s creditors, including its suppliers, to ensure your business can continue trading in a tough financial situation and work towards a recovery.

Is your company going through a tough financial period? Businesses can experience a downturn in cash flow for a range of reasons, from new competition to a missed or late payment from an important customer.

When your company’s cash flow slows to a crawl, it can often lead to insolvency and the need for urgent insolvency procedures. This can be prevented by using informal turnaround techniques to help your business reach agreements with its suppliers. 

Informal turnaround involves working out agreements with creditors that let your company continue trading through a tough financial period. Successful turnaround arrangements let you focus on what’s important: running your business.

We’ve helped hundreds of UK businesses move forward through difficult financial situations. If you have questions about the turnaround process, contact our expert business turnaround team to learn more about how we can help you.

 

 If you feel your business is in financial difficulty it is important to deal with it immediately. Call now on 0845 676 9033 for free confidential advice, or visit our contact us page.

Introduction to FRP

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    What is informal turnaround?

     

    Is your company experiencing cash flow problems? Poor cash flow can leave your company unable to meet its suppliers’ terms, making it difficult to source products, equipment and other essential items and services to operate your business.

     

    Even a temporary setback in cash flow can lead to long term problems, especially if your business depends on its suppliers to keep operating. A small problem can often develop into a slowdown or supply shortage that seriously affects your business.

     

    Informal turnaround involves reaching informal agreements with your company’s creditors, including its suppliers, to ensure your business can continue trading in a tough financial situation and work towards a recovery.

     

    Is informal turnaround suitable for your company?

     

    Since informal turnaround involves negotiating with your company’s suppliers to make sure it can continue operating, your business needs to have a viable future – one that can be reached once its current financial issues are solved.

     

    In order to facilitate turnaround, your business will need to have the support of its creditors. You will need to show creditors that your company is capable of creating steady, consistent cash flow in order to repay its debts.

     

    This makes informal turnaround most suitable for viable companies that face short-term cash flow issues. If your company is no longer viable, other insolvency options may be more appropriate.

     

    What are the benefits of informal turnaround?

     

    There are several benefits to negotiating informal turnaround agreements with your company’s creditors. The biggest benefit is that your company can continue trading without having to enter into administration or propose a Company Voluntary Arrangement (CVA) to its creditors.

     

    A successful informal turnaround agreement will often give your company a greater level of credit with its suppliers, allowing it to continue operating, until its cash flow returns to normal.

     

    As part of a turnaround arrangement, your company’s directors remain in control of its direction and operations. There is no need to use insolvency procedures to shield your company against potential legal action from its creditors.

     

    It’s vital that your company complies with the terms of its informal turnaround, so as to retain its creditors’ confidence. If your company’s recovery plan fails, it could face legal action from its creditors that leads it towards an insolvency procedure.

     

    Contact us to learn more about informal turnaround

     

    If your company is experiencing a disruption in cash flow, it’s important to seek out expert advice as soon as you can. Reaching an informal turnaround agreement with your creditors can give your company the breathing space it needs to keep trading.

     

    Our business recovery experts have provided advice and assistance to hundreds of UK companies. Contact us now for a free initial meeting to learn about the informal turnaround process and understand the recovery options available for your business.