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Cash flow concerns & managing debt

Ways to manage if you’re suffering difficulties.

Negative cash flow is one of the most important early warning signs of emerging difficulties within a business.

Ways to manage cash flow

There are ways to manage cash flow if your business is still viable but suffering short-term difficulties.

  • Consider increasing your credit: As soon as you realise you’re experiencing a shortfall, speak to your bank or accountant and consider whether increasing loans, reviewing loan terms and/or overdrafts, or other forms of debt finance could help your business.
  • Consider if your business finances are structured properly e.g., longer term finance for asset purchase and short time finance for working capital.
  • Consider if invoice finance could be used to bridge short-term cash flow needs.
  • Consider selling and leasing back assets such as machinery or equipment or if certain business assets are not being used, consider if they could be sold on.
  • Review all maintenance or outside contracts and their credit terms.
  • Consider any business support schemes which may be available locally. You can find a full list on nibusinessinfo’s support finder External link icon.

Before making any decisions around the financial structure of your business it is important that you seek guidance from your professional advisers such as your solicitor or accountant to ensure that all options and any tax or other financial implications have been considered.

Review how you manage late payments

Late payments can affect cash flow and can leave your business struggling, so it helps to have effective credit control measures in place:

  • Review payment terms
  • Have a disciplined process around late payments
  • Automate follow ups
  • Manage the relationship - your customer may also be having issues with late payments so try and understand the impact where possible.

For more guidance, check out the British Business Bank’s guide on how to deal with late payments External link icon.

Managing debt

  • Identify priority payments such as staff wage or salaries, VAT, tax bills, rates, business mortgage or rent, utility bills, loans repayments.
  • Speak to your bank, accountant or other business specialist as they may be able to help identify areas for review, like negotiating a more affordable tax payment plan with HMRC if that is a concern.
  • Ask yourself difficult questions about whether the business will turn around if market conditions improve, does your existing business model work and can you realistically pay back the debts?

Bounce Back Loans

Other sources of information and guidance

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If you’re concerned about cash flow within your business, speak to your relationship manager or small business adviser directly or use our webform to request a call back.

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