Companies that are facing financial problems or serious interruptions to their business can be difficult to detect by their lenders and suppliers providing credit terms. Landlords, service providers and businesses with large supply chains are often highly exposed.
Any business that provides terms of credit faces the risk that a customer cannot pay an outstanding amount or enters formal financial distress such as being placed into administration or declared insolvent.
Prevention is the best approach. Working closely with our Business Advisory Team, we can prepare contractual agreements such as terms of trade that increase your collection rights.
This may be in the form of preparing a ‘retention of title’ clause in to your contracts whereby a customer does not own the title of the goods provided until the full amount has been paid. We also suggest that if you are selling or renting out your goods, they have been added to the Personal Property Securities Register in a compliant manner. Both of these steps are incredibly effective for recovering the debt or preventing the loss of goods.
For secured creditors, our Dispute Resolution and Litigation Team will work closely with you to successfully pursue assets and guarantors, and employ our substantial experience to help resolve priority contests between other creditors. We also advise on how to go about terminating contracts if a customer defaults and determining a final cost that must be paid immediately – even if the contract had significant time left to pay. Our experience in the property sector sees us often advising landlords on how to handle an insolvent tenant and serving eviction notices on their behalf.