Sometimes, a company might be struggling to pay day-to-day bills, but could still become profitable again. A fast track debt management plan could be the answer.
What is a Fast Track Debt Management Plan?
Sometimes, a company might be struggling to pay its day-to-day bills but, with some help, could well become profitable again, and a fast track debt management plan can be the way to do this.
In essence, all company debt is consolidated into one manageable monthly payment, such that the business is able to continue trading whilst simultaneously making frequent, but affordable, payments to its creditors.
What Are the Benefits of a Fast Track Debt Management Plan?
Fast track debt management plans are often used as a more cost-effective alternative to a CVA (Company Voluntary Arrangement). Not only this, but, as a fast track debt management plan is an informal process, it can be fairly quick and easy to set up and get going with, providing no serious action is being taken by any of the company’s creditors.
In addition to being cost-effective and quick to set up, the main benefit of a fast track debt management plan is that it affords the company a little breathing room in order to get back on its feet, recover from any losses and become viable once more.
Some further benefits include:
- Initial pressure from HMRC and the company’s creditors is immediately eased whilst the arrangement is being prepared.
- All payments to creditors are centralised into one single, much more manageable, monthly payment.
- Directors and shareholders maintain control of the company.
- A fast track debt management plan is not required to be public information.
- Reduced payments will inevitably ease any pressure on business cash flow.
- A fast track debt management plan is considered to be beneficial for all parties, both directors and creditors, as creditors are usually pleased to receive assurance that any outstanding debt will be paid back in regular a reliable manner.
Is my Company Eligible?
Your company is likely eligible for a fast track debt management plan if:
- The company is insolvent (ie. the company is unable to pay its current debts as and when they are due).
- Projected cash flow forecasts show that the agreed repayment terms are realistic and achievable.
- Company directors are confident that there is a viable future and a good chance of recovery.
- A fast track debt management plan must be proposed and instated before a winding up order has been granted against the company.
What Does a Proposal for a Fast Track Debt Management Plan Typically Contain?
The proposal for a fast track debt management plan should contain information about the business, including in-depth detail of the company’s affairs including profits, losses and any other significant transactions or noteworthy information. The plan should then include information on the company’s creditors and debts and outline the main propositions of the plan, such as the duration and the amount repayable every month.
Seeking Help From an Expert
To find out more about whether or not a fast track debt management plan could set your business on the path to recovery, and for help composing a proposal and managing this process, contact Voscap today on 020 7769 6831, or email help@voscap.co.uk, to speak to one of our business recovery specialists.
