Is my business Insolvent? Ways to tell.
Insolvency from the view of the bank. Are you always at the limit on your bank overdraft? Some weeks you may have received some payments in and then straight away you have to make payments back out again that you have been delaying, again taking the overdraft back up to its limit. This is known as bouncing the overdraft ceiling. Has your bank returned cheques? So not only are you up to your overdraft limit you have exceeded it. Not a good sign. Has your bank asked you for increased security? They may want a personal guarantee or security by way of a charge on your house. This is a sign that they are concerned that they may not make full recovery of lending to the business. Have you asked your bank for a loan or an increase in your overdraft and been refused? This is a sure sign that they think that they are exposed as much as they want to be with your business. Have they asked you to reduce your overdraft? This is usually a step which follows a refusal of a loan. They will have taken a look at your business and decided that they need to be reducing their exposure in case problems deepen. Again they may ask for that personal security. Is the bank asking for more management figures, greater detail and more often? This may be a prelude to them asking to send in their own investigating accountants. This happened a lot in the 1990's when banks were very keen to put in Administrative Receivers where they held floating charges. The bank and its attitude to you and your business may be a very good indicator as to whether or not the business is insolvent. If any of these instances ring a bell with you, perhaps you should consider calling for some expert advice. Information provided by Steve Thatcher of Help With Debt (UK) Limited and total debt solutions company. For all further reading see http://www.helpwithdebtuk.com For personal contact email sthatcher@helpwithdebtuk.com For Steve's thoughts see http://steves-debt.blogspot.com If you have any debt problem whatsoever either personal or corporate make Steve your first call all advice is free. Finally if in the UK and you need a friend to speak to call 01162171406 About Author Steve is a qualified solicitor who specialises in debt solutions for businesses and companies alike. From pre-pack administrations to walk through bankruptcys he is always free to talk to. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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