More creditors willing to adopt formal pay deals

30/3/2009

According to LC Corporate Strategies, the turnaround arm of national corporate recovery firm Leonard Curtis, more creditors are willing to arrange formal time-to-pay deals, or to negotiate reduced amounts in full and final settlement of outstanding debt; as opposed to issuing legal proceedings that could result in a formal insolvency process, where the likelihood of a dividend to creditors is minimal.

Commenting, Stephen Fern, Director at LC Corporate Strategies, says:

"Managing cashflow is becoming increasingly difficult as customers seek increased credit terms, which cannot subsequently be passed on to suppliers, and securing additional funding remains a challenge in the current climate. If a company is struggling to satisfy creditor payment pressures and service their funding commitments, it's vital that they keep lines of communication with creditors and funders open and transparent. Ignoring the issues and severing lines of communication will have a negative impact on the ability to negotiate successfully with creditors.

"Where a viable business exists, and a realistic and achievable future strategy requires the support of creditors through either a time to pay arrangement or a reduction in any outstanding debt due in full and final settlement of a liability, creditors are becoming increasingly responsive to such proposals. Behaving in a transparent, professional way with creditors; whether HM Revenue & Customs, a landlord or a critical supplier, is far more likely to result in a positive outcome for both parties."

For more advice on how to manage cashflow or negotiating time-to-pay arrangements with creditors call Stephen Fern on 0161 835 1900.

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