It is true that the Bounce Back Loans were given with no personal guarantee. However, I have seen some financial institutions approach the directors of companies for repayment plans, even if the loans were used correctly. It is, of course, a personal choice as to what the director wishes to do in those circumstances, and we are not here to judge – the director could agree to take on the liability personally, but I would caution against a longterm payment plan as we have seen some significant interest rate rises which could affect that. HMRC will not allow a director to strike off a company if there is a Bounce Back Loan. As such, the director can seek advice from insolvency professionals. Based on individual circumstances, experienced insolvency professionals can guide the director through the best-tailored process for them and their business. This could include negotiating a payment plan if the company has a longer-term future or properly closing the company down, ensuring that the director does not incur any personal liability. One of the benefits of early interaction with an insolvency professional is the time for them to set out route maps based on the information that they can ingather – the more time, the better information, which can lead to sensitised cashflows and future market conditions being tested against business plans. It’s true that no one has a crystal ball, but making decisions based on research and information is the best way to progress and can assist in the tailored solution. How do you approach working with the stakeholders involved in an insolvency process, such as creditors, employees, and directors? Within an insolvency process, there are often multiple competing interests. However, there is often one common thread – it is a stressful experience. When called in by the directors, they are the first stakeholders we meet. Normally directors are experiencing extreme stress, and, in many cases, this does lead to physical illness. At the outset, the team are always in informationgathering mode. We have several standard documents that do need to be completed from a statutory perspective, and this forms the basis of how we can provide advice and develop a tailored strategy for the company. The main part of this stage is listening and understanding the journey that the directors and the company have been on up until that point. This narrative is then compared to formal accounts, and a full picture of the situation is formed. It is usual at this stage that we would uncover the priority issues, for example perishable items that we may need to deal with first from an asset perspective or indeed from a liability perspective those creditors who have gone further down the road of debt recovery. This then gives us a ‘to-do’ list in order. Irrespective of our priority todo list when called in, our team at Middlebrooks speak with any employees. An employee’s claim is complex and often needs multiple meetings and conversations to ingest the information, collate it, verify, and then send it to the government for processing. In our experience, early and often communication is vital for this group of stakeholders to reassure them. In addition, we work hand in hand with government agencies, such as PACE (Partnership Action for Continuing Employment), to get employees the information they need to make claims or seek new employment as swiftly as possible. The COVID-19 pandemic has changed the way in which the whole world works, and this has led to the markets for some businesses not being there anymore. Finance Monthly. Front Cover Feature 21
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