Neil Vinnicombe is a Partner at Begbies Traynor in Bath. Neil specialises in business rescue and recovery and has more than 30 years’ experience in the industry. Begbies Traynor is the UK’s market leader in corporate recovery and rescue and the pandemic has created a surge of enquiries from organisations looking for advice on restructuring and insolvency options. We met Neil for a virtual coffee to find out more about his work and the options available to businesses.
How have you been supporting businesses through the crisis?
Mainly by trying to establish whether the business is actually viable (and can produce an income for the owners) ) and assessing its short-term cash requirements, as cash is always key.
What are the main issues you are seeing?
Cash flow issues (or lack of!) usually caused by a drop in turnover. Businesses have availed themselves of the furlough scheme, bounce back and CBIL loans, and deferred debt repayment (mainly HMRC), but as the government’s initiatives unwind/end and rescheduled debts become due, a perfect financial storm is brewing. I do fear those without sufficient reserves or positive future sales/cash flow may find choppy times are ahead. There are also directors now seeking advice on whether to use the aforementioned loans, because it seems that some have secured the funds and are paying it to themselves instead of retaining it for working capital in the business. This will create issues if the business fails in the future.
How can you help?
I think listening and understanding the issues (both for the business and the proprietor) is paramount. Only then can we give options or suggest solutions to let people consider the pros and cons and make informed decisions in a timely fashion. Where we identify an issue that we can’t directly resolve or assist with, we will often signpost people to other trusted professionals we work with. We are frequently used as a sounding board or a safety net, and for worst-case planning in case they cannot resolve the current business issue being faced. We are also regularly asked to help seek finance for businesses and individuals and have a vast array of contacts in the refinance markets. We try to match the right situation to the right lender.
Begbies Traynor has setup a confidential business rescue advice line. How does this work?
Our advice line team assesses whether the case/call is about restructuring or insolvency and passes referrals to the local office with the appropriate skillset to give the best advice. All referrals, advice calls and meetings are strictly confidential and without charge.
What’s your best piece of advice?
My mantra is to seek help sooner rather than later, especially as initial meetings are free. My approach to a new matter is ‘how can we save this business or help this individual to avoid a formal insolvency process’. While we are often perceived as the grim reaper, our goal is to avoid a failure. The earlier we see an issue, the more likely we are to advise alternative solutions to avoid liquidation or bankruptcy. Sadly, all too often, we are brought in when we are only left with options of last resort. Recently, a dentistry chain sought our advice slightly earlier on the decline curve, and we were able to sell all bar two of the practices, saving over 100 jobs in the process.
To get in touch with Neil call: 01225 316040 or email: email@example.com