Creditor and Lender Negotiation

Putting lending in place

Many creditors and lenders will only lend or advance credit to family-owned and run businesses or SME (small and medium sized enterprises) companies if the owners provide personal guarantees or additional security. These may have been put in place years earlier and forgotten about, or with multiple suppliers or lenders. Do you know the value of your personal obligations should they be called upon if the business defaults? Trade suppliers such as builder merchants commonly include a standard personal guarantee clause within forms used to open trade accounts. Often this has been required to be signed by all company directors.

Capping your obligations

If you do not attempt to cap your obligations, you may face an exposure to repaying the debt personally. This in turn can lead to your personal residence and other assets being at risk.  The worst case scenario can result in you facing bankruptcy.  This should be avoided wherever possible.

What the implications are

Dunedin Advisory can advise you on the financial implications of entering guarantees or offering additional security.  We will let you know how this will impact upon you personally. We can explore operational alternatives which can avoid the necessity for high level personal risk.

How we can help

We have assisted many directors in their negotiations with creditors and lenders in respect of personal debts or obligations. For example we have:

  • review original agreements and the consequent financial ramifications
  • quantify the ceiling of personal exposure should the business not meet its obligations
  • prepare an individual’s personal asset and liability statement and formal report on available funds offered as a negotiated settlement with lenders
  • negotiate time to pay arrangements
  • negotiate reduced payments over a longer term
  • help you get a breathing space from creditors
  • enable interest to be frozen with no penalties
  • implement Debt Arrangement Schemes (DAS)
  • advise on the impact of personal insolvency should no negotiation be feasible. In many instances where a reasonable return can be made to creditors, our clients have avoided formal insolvency

We will help you assess your situation, explore your options, provide you with advice and develop a solution for you. To arrange a free, no obligation consultation click here or call 01592 630085.