Insolvency: the telltale signs

Insolvency: the telltale signs

January 26, 2017

Financial difficulty, and ultimately insolvency, is an issue any business owner hopes to avoid, but sometimes it creeps up on you when you least expect. Running and maintaining a business can be highly enjoyable and demanding, requiring you to split your attention across many different areas, but, occasionally, you could overlook something vital. As such, if not dealt with, an issue may arise and bite where it hurts most – your finances.

Of all the areas where a business can fall foul, cash flow is certainly one of the most common. Suffering from a reduction in cash flow can really sting, making paying wages, suppliers, energy bills, tax and so on all the more challenging. Sometimes the effects can be extremely damaging and even force your business into debt.

Another common misery for business owners can stem from customers – particularly those who haven’t paid for goods and services. It can be a real horror story for your finances, hacking away at your capital until they’ve paid for any goods and services received in full. It can be all the more painful when it’s more than one customer, potentially causing your business to incur debts.

But if you think these issues are bad enough, business owners should also keep an eye on the data they’re using. Spotting unreliable data before your business forks out a fortune on marketing to the wrong customer demographic can prove a lifesaver for your business. Not attracting the right customers to your business means you’ve wasted money and will suffer reduced cash flow as a result. Combined with the issues that may follow, business debts are inevitable.

If your business is suffering from any of these issues you really need to sort them out… fast. Not doing so can easily cause your business to become insolvent. As such, you may face daily cash demands from creditors and suppliers may put a stop on your accounts. It’s always best to sort any issues before they get out of control. However, if you are slipping into insolvency, there is still hope for your business. At Rangewell, we can source an appropriate and affordable finance solution to help your business get back on its feet. There are many finance solutions readily available, including Business Loans, Merchant Cash Advance, Invoice Finance and much more!

  • Loans: With a loan, you can borrow from £5,000 up to as much as £1,000,000, and it comes as either secured or unsecured. Secured Loans boost the lender’s confidence to offer you larger sums by using personal assets, such as the borrower’s home and equipment. If a business fails to repay the loan the lender can seize assets to recover costs. Meanwhile, Unsecured Loans aren’t secured using assets but, instead, require you to express a commitment to repay the loan in due course. You’ll also need to demonstrate, in detail, your business’s ability to afford the monthly repayments.
  • Merchant Cash Advance: This method of finance requires your business to have chip ‘n’ pin devices or other forms of card payment technology. To apply for and receive an advance you’ll be required to present business reports detailing your clientele’s latest card transaction activity for 3 consecutive months or more, depending on the lender. This is to demonstrate the reliability of the card transactions made by your customers. The subsequent advance can be repaid in two ways: fixed monthly repayments or via a percentage of your future monthly card sales.
  • Invoice Finance: If you’ve performed a service or sent a requested product to a client, your business is out of pocket until they pay up. Waiting for lengthy periods of time can prove damaging to your business, hampering growth and sustainability. Invoice Finance unlocks the cash sealed away in your unpaid invoices, giving you peace of mind. Offering your business a loan equal to 90% of a single invoice’s total worth, this means of finance can help carry your business until you hit a period of high sales.

Our values are simple – We’re on your side

At Rangewell, we support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.


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David Harrison

David Harrison

Content writer