Wednesday 9th of June 2010
In the aftermath of the recession, a multitude of Britons may have dipped into their own savings and finances to try and keep their companies afloat.
Information on IVAs could, however, offer much-needed assistance to those accruing personal debts for the benefit of their businesses.
That’s because figures from insolvency trade body R3 suggest UK firms could be set for more trouble should interest rates rise to 3.5 per cent, as called for by the Organisation for Economic Co-operation and Development.
If rates go up to this level, some 12 per cent of small companies believe they are likely to go under, R3 data shows.
IVAs, though, could help self-employed Brits who constantly put their hands in their pockets when their enterprises run into financial trouble.
They can’t get rid of the debt on the company itself, but money owed - worth more than £15,000 - on personal loans taken out to help the firm could be erased after a period of around five years.
IVA info, therefore, could offer timely support and show hard-working individuals that it is possible to get out of the red after helping to sustain their business.
"An increase in the cost of finance either for working capital or to fund expansion are factors than can lead to corporate insolvency," R3 president Steven Law says.
By Chris King
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Getting IVA answers now could prevent the 0 per cent trap
