January trends and the challenges faced by business owners

Published: 13/01/2025 By Andrew Bailey

January appears to be another busy month with the last quarter of 2024 seeing a significant uptick in enquiries for insolvency advice.

Liquidations are still the most common procedure we see clients implementing but it was really nice to have two Company Voluntary Arrangements approved in December. They do need reform in my view but the framework of how they should work is sound in that it keeps the existing company in place, enables the company to make affordable contributions to the arrangement so that creditors benefit to a greater extent than if the company was shutdown and placed into Liquidation.

It feels like there is a sense of uncertainty and lack of confidence around. If I looked at some recent trends I have seen more cases where directors face dealing with lenders to whom they have provided personal guarantees for company borrowing. There is a time and a place for this but I would urge any directors considering providing personal guarantees to do their homework.
 
What is the purpose of the loan and are the funds going into a black hole? What is the interest rate and total amount repayable and what is the amount they would need to pay personally if the company defaults and charges, interest, etc are applied?
 
These questions are often overlooked when there is a desperate need for cash.

I sense that getting insolvency advice for business owners is hard enough. Nobody likes to accept their business is struggling. If one of the consequences is facing up to personal guarantee liabilities it makes it that much harder.

Unfortunately my final insight is about mental health. In so many of my cases I deal with there are individuals with mental health challenges. Some worse than others but all are struggling to some extent. It can be crippling for those suffering and often invisible to others.
 
Running a business is lonely at times and carries an enormous burden and the owners will often put on a brave face and tell everyone it is fine when it isn’t. They may look like they are doing well on social media, drive a nice car and live in a desirable house. From my experience, looks can be deceiving.
 
Sometimes we can be so busy that we don’t take the time to ask questions of others to see how they are getting on. If you know an owner of a business – big or small – see how they are getting on because they will probably appreciate someone asking. For many it is not an easy world to be a business owner at present.