Financial difficulty is something many business owners face at some point. Whether it is a cash flow crisis, mounting debts, or a sudden loss of a major customer, the feeling of being overwhelmed is very real. The most important thing to know is that you are not alone, and there are people and organisations that can help.
Do Not Suffer in Silence
The biggest mistake business owners make when facing financial difficulty is trying to deal with it alone. Pride, embarrassment, and fear of judgement keep many people from seeking help until it is too late. But the earlier you reach out, the more options you have.
Your Accountant
Your accountant should be your first port of call. They understand your business's financial position better than anyone and can help you assess the severity of the situation. A good accountant will help you create a realistic cash flow forecast, identify areas where costs can be cut, advise on tax obligations and potential deferrals, and refer you to specialists if needed.
If you do not have an accountant, or your current one is not being helpful, now is the time to find a better one. Look for someone who specialises in small businesses and has experience helping businesses through difficult periods.
Business Debtline
Business Debtline is a free service run by the Money Advice Trust. They provide confidential advice to small business owners and self-employed people who are struggling with debt. Their advisers can help you understand your options, prioritise your debts, and negotiate with creditors.
Contact: 0800 197 6026 (Monday to Friday, 9am to 5pm) or visit businessdebtline.org
Citizens Advice
Citizens Advice offers free, impartial advice on a wide range of issues, including business debt. They can help you understand your legal rights and obligations, and signpost you to specialist services.
Contact: Visit citizensadvice.org.uk or call 0800 144 8848
A Licensed Insolvency Practitioner
If your business debts are serious and you are concerned about insolvency, you should speak to a licensed insolvency practitioner (IP). They can advise on formal options including:
Company Voluntary Arrangement (CVA): An agreement with your creditors to repay debts over a fixed period, typically 3 to 5 years. The company continues to trade while making agreed payments.
Administration: A formal process where an administrator takes control of the company to try to rescue it or achieve a better outcome for creditors than immediate liquidation.
Liquidation: If the company cannot be saved, a licensed IP can manage the process of closing the company and distributing any remaining assets to creditors.
Many insolvency practitioners offer a free initial consultation. You can find a licensed IP through the Insolvency Practitioners Association (insolvency-practitioners.org.uk) or R3 (r3.org.uk).
HMRC
If you owe money to HMRC, contact them directly. As discussed in our article on HMRC debt, they offer Time to Pay arrangements that allow you to spread your tax debt over an agreed period. The key is to contact them before they contact you.
HMRC Payment Support Service: 0300 200 3835
Your Bank
If you have a business bank account or existing lending with a bank, speak to your relationship manager. Banks have dedicated teams for businesses in difficulty and may be able to offer temporary overdraft increases, payment holidays on existing loans, or restructured repayment terms.
Mental Health Support
Financial difficulty takes a toll on mental health. If you are struggling, please reach out for support:
Samaritans: 116 123 (free, 24/7)
Mind: 0300 123 3393 (Monday to Friday, 9am to 6pm)
Business in Mind (specifically for business owners): businessinmind.co.uk
There is no shame in asking for help. Your mental health is more important than any business problem.
Short-Term Finance
In some cases, short-term business finance can help stabilise a difficult situation. For example, if you need to clear a pressing debt, fund a contract that will generate revenue, or bridge a temporary cash flow gap. However, borrowing should only be considered if you have a clear plan for how the funds will improve your situation and how you will repay the loan.
At Paxford Finance, we assess each application on its merits. We understand that businesses go through difficult periods, and we look at the full picture rather than making snap judgements.
Steps to Take Right Now
If your business is in financial trouble, here is what to do today:
You Are Not Alone
Thousands of UK businesses face financial difficulty every year, and many come through the other side. The key is to act early, seek help, and make informed decisions. Whatever your situation, there are people who can help.