Monday 13th of September 2010
Seeking individual voluntary arrangement (IVA) answers could be a sensible option for business owners who have racked up serious levels of personal debt in their attempts to keep their enterprises running.
According to figures from insolvency trade body R3, some ten per cent of small companies are concerned they could go bust if they were to lose their public sector contracts.
The data shows 24 per cent would see their profits drop if these deals were cut, while 16 per cent would be unable to fund expansion, 14 per cent would be forced to consider making redundancies and 11 per cent would be left in serious financial trouble.
Answers on IVAs may, however, offer assistance to self-employed business owners who have had to dip into their own pockets and take out personal loans to keep the firm afloat.
The measure can only help reduce personal debt on unsecured financial products, but could leave you completely debt-free after around five years of discipline and hard work if you've been relying on credit to boost your company.
Commenting on the findings, R3 president Steven Law says: "With the prevalence of small businesses in the UK and an increasing reliance on public sector contracts dating back to [the] 1990s … cuts are likely to be felt extremely keenly."
By Kimberley Parsons
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- An IVA can turn unpredictable debt into predictable repayments
