Timely advice can stave off bankruptcy
Mum and dad directors of businesses face bankruptcy if they leave it too late to get financial advice in the current climate of rising debt and interest rates, according to accountants and business advisers Hall Chadwick.
Brent Kijurina, a partner in the Insolvency and Business Recovery division, said that many small and medium-sized family businesses are “borrowing beyond their means to shore up ailing businesses”.
“These could possibly be rescued if the mum and dad directors sought early intervention and professional advice.
“As the housing market slumps, many of these directors are losing equity in their homes, and must look for alternative sources of funds to prop up their struggling businesses,” he said.
“Sometimes small and medium-sized businesses are simply taking on too many loans to keep going, with the result that they getting into debt and are in danger (of bankruptcy) if the company is wound up.”
Kijurina’s advice is to get help early by seeking financial advice “on the options open to them, rather than coming to us for advice when it is too late and liquidation is the only option”.
“Many small businesses are too proud to seek early advice, choosing to borrow instead with sometimes dire consequences.”
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