When businesses seek legal guidance too late

Spoke too late

One of the biggest mistakes made by struggling businesses is seeking guidance too late. John Harlow of Harlow Insolvency

told us more WORDS BY TOM YOUNG

Due to an easy application process and lack of due diligence, the full impact of the government’s bounce back loans is now becoming apparent, according to John Harlow.

“We are told there was £11bn worth of fraudulent bounce back loan applications, and we’re seeing the effects now. If your business was struggling before Covid, the loan might’ve kept you going for the last two years, but coming out the other side, the same issues will be waiting, plus rising costs. They have been called ‘Zombie Businesses’ – continuing to survive, but not actually productive. Without Covid, they’d have been wound up two years ago.”

The courts don’t like the use of winding-up petitions to pressure debtors to pay up, but creditors are getting tougher.

“Winding-up petitions were suspended during Covid, but now they’re back and we’re also seeing more voluntary liquidations than rescues. If you get a winding-up petition or statutory demand, you should take advice as soon as you can.

“My biggest bugbear is that people don’t take advice early enough. Many dislike the word ‘insolvency’, believe they can solve it themselves, or are just straight-up in denial. If businesses spoke to us sooner, they’d have a better chance of survival.”

Harlow Insolvency initially offers free confidential advice, so if you think you might be struggling, don’t hesitate to reach out.

“We might be able to put a rescue plan together and help you avoid an insolvent winding up of the business, disqualification, fine or – in extreme cases – prison.”

If you think you’d benefit from early advice, get in touch via mail@harlowinsolvency.co.uk or call John on 0116 275 5021.

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