If you are noticing issues with profitability, having problems with meeting your tax bills, or have any outstanding debts to the ATO then you are probably thinking that you will have to resort to insolvency via administration, liquidation, or receivership. This is not the only option and in some cases business restructuring could be a more practical for your business as it can prevent the business from becoming insolvent.
The restructuring process is currently considered to be “informal” as it is not strictly governed by legislation. The initial purpose of restructuring is to preserve the assets of the business, but it is also a preferable outcome that the business as a whole remains a going concern. One of the main benefits of a restructuring or rescue program is that it is private. Formal administration and receivership procedures are generally widely publicised, which can often result in a more difficult negotiating process with creditors and customers of the business and can also alert the competition to a major opportunity in the market place.
Steps to Take
There are a range of areas within the business that can be addressed in order to repair a failing business. There are a number of actions that can be undertaken as part of restructuring your business including:
• Negotiating with lenders to reschedule debt repayment arrangements – this will give the business some much needed breathing space,
• Organising additional facilities, such as a line of credit, overdraft or consolidating debts over a longer term to smooth out cash flow spikes
• Providing advice regarding the reorganisation of your operation, in particular, how to cut costs, and/or reallocate resources
• Focusing on generating cash flow by working with debtors to bring in monies that are owed and reducing any unnecessary expenses
• Negotiating with major customers to increase prices, shorten payment terms and even increase orders,
• Organising for an injection of capital by bringing in fresh equity
The expert lawyers and accountants at The Quinn Group are able to assist your business and provide advice to all of the areas listed above. The Quinn Group are able to help businesses through these testing times by providing advice and guidance on the entire range of services that are required by a business to get back on its feet. If you would like assistance with business restructuring contact us on 1300 QUINNS or click here to submit and online enquiry.
