For help please call Sarah on: 0114 285 9500

For help and advice contact Sheffield 0114 2859500 or Rotherham 01709 331300 or Huddersfield 01484 483095

For help and advice contact Sheffield 0114 2859500 or Rotherham 01709 331300

Could the collapse of Carillion be the tip of the iceberg?

The liquidation of Carillion this week has sent a shockwave through the business community. For many businesses who were suppliers and subcontractors to Carillion, there is uncertainty about the future.

The Government’s Insolvency Service, which runs the Official Receiver service that is dealing with the winding up, has said that over 90% of Carillion’s private sector customers want the company to continue to supply services in the interim, “…until new suppliers can be found.” The Government has also said that funding is being provided to the OR to allow essential public services to continue.

What will the consequences be?

The long-term effect of Carillion’s liquidation is difficult to predict. However, it seems likely that many businesses will be directly and indirectly affected by the insolvency. There is a risk that a ‘domino’ effect may be created if companies in the same supply chain are forced to close their doors, with each having a further knock-on effect on the next.

Support from the Banks and HMRC

HM Revenue and Customs are offering support through their Business Payments Support Service (BPSS) and are offering practical support to businesses that are struggling to pay their taxes by deferring debt and offering repayment plans.

Banks have also met with Government officials to seek assurances that they will offer support to small businesses that are affected.

Your business survival checklist

If your business is affected by the liquidation of Carillion, it is important to act quickly to ensure that a setback doesn’t turn into a disaster. Here is a checklist of some of the things you should consider to ensure that your business stands the best chance of survival:

  • Take time to consider what the effect will be on your business and, if it appears that your company will be hard hit, take action quickly to seek help.
  • Speak to your bank manager to explore options for additional funding to cope with any short-term cashflow needs, but make sure that your cashflow projections show that the business can afford to repay any new credit before taking on any new liabilities.
  • Contact HMRC’s BPSS to discuss making a payment arrangement if tax bills cannot be paid on time.
  • Be proactive in ensuring that other customers are paying on time.
  • Consider alternative funding options such as invoice finance or asset finance.
  • Review your business activities to identify possible areas for cost savings.
  • Speak to your customers to identify other ways of generating more income from your current customer base. It is often much more feasible and practical to sell more to your existing customers, than to find entirely new customers.
  • Seek new business opportunities in other areas to avoid over-reliance on one customer or one sector, but be mindful of the risks and costs of entering new markets.

Help is available

And if you have concerns about the viability of your business, speak to us to find out about our business turnaround and business recovery services. Insolvency doesn’t have to mean the end of a business, but it is vital that you take expert advice as soon as possible. The sooner advice is taken then the more options there will be to choose from, and the more palatable those options will be.

Call us today on 0114 285 9500 for friendly, expert advice. We can help.

 

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