Invoice Factoring after Liquidation

Restart business liquidationOnce a company has completed its insolvency process, out of the ashes raises a phoenix company, this is the new trading vehicle, which may have a requirement for business finance.

Hopefully most directors have learnt what mistakes and events made the old company fail. This should now marks a new beginning in their business life.

there are a number of different types of business finance for phoenix company that can get cash flow up and running again to ensure the business has the best change of surviving. 

If you can’t meet your financial obligations you may have no option other than liquidation, but invoice finance could be a way out of the mess.

Late payment is one of the largest threats to the survival of any SME. Over 65% of small business fail within their first five years of trading.

A number of reasons for none payment are usually given, such as insolvency, late payments or a dispute. This frequently can cause profitable firms to go insolvent because they simply don’t have enough cash in the bank to survive. Bad debt protection is an option to bounce back after the loss your funds.

What is a Phoenix Company?

A phoenix company is a term used to describes a business that has been purchased out a formal insolvency process, these can be an administration or liquidation. The business is often purchased by the existing directors. The term refers to phoenix rising from the ashes, from this point forward it will be known as new co. There are strict rules that govern the use of this process.

What is a Pre-Pack Administration?

A pre-pack administration is an insolvency procedure that is used for a connected party or third party to buy the assets and the business. A pre-pack administration involves the sale of some or all business assets prior to the appointment of an administrator.

The difference between a pre-pack administration and a conventional administration is that the sale of the business and its assets has already been sold before the administration.

Finance for Pheonix Businesses

Securing funding for a business is difficult enough in 2021 for businesses that have suffered recent credit problems. Although there are a number of valid reasons for the problems. In this case we can assist your Phoenix business to source finance from a number of funders.

The different types of finance for phoenix business is reduced greatly.

Type of Phoenix Business Finance

Invoice Factoring

Invoice factoring for a Phoenix business is a type of invoice finance facility when a business sells its invoice to a factoring company. This type of business finance allows a business to release cash from their unpaid invoices and leverage the value of their sales ledger.

A lender will look at how reliable those clients have been in the past, whether they think they can rely on the invoice being paid and how long the payment terms might be. If they decide to go ahead, they will advance you a proportion of the invoice total – such as 75%. When the invoice is eventually paid, they will return the balance to you minus their fee.

Due to starting again under a new company vehicle, this new company will not have any credit history. Invoice Factoring uses your customers credit ratings to get a fixed credit score, making it a perfect funding solution.

One downside is that you need to trade with other businesses, so you cannot using this type of finance to fund consumers.

Business Loan

Business loans for phoenix companies are a little more harder to come by, as stated above you are trading under a new corporate vehicle, as such you will be classed as a new start.

Lenders will be looking for personal guarantees or some form of security from directors to cover the loan should they have an appetite to lend.

Bridging Loan

A bridging loan for a phoenix company is a form of advance to be uses against a property, a bridging lender will require security on a property to lend for this type of finance

Invoice Finance Pre-insolvency

Every year, thousands of companies are forced into liquidation because of a cashflow crisis. Maybe it’s because of large unforeseen bills; perhaps it’s an issue with late payments. Either way, if a business finds itself unable to cover its liabilities, it faces the prospect of liquidation unless it can find cash fast.

If your business faces the prospect of insolvency, you’ll have to ask yourself two searching questions. Firstly, is it possible to find an injection of short-term capital to save the company? If so, is the company worth being saved? For this, you will need to feel confident that this is a viable going concern.

Many businesses on the brink of insolvency are perfectly viable. A cash flow shortage can happen to any small business – even one which appears to be in robust health. The work may be flowing into the company and you may be run off your feet fulfilling orders, but that won’t mean the money is coming into your account quickly enough to meet your liabilities.

Apply for Phoenix Company funding

Should you have started to trade again following on from a liquidation or pre pack administration and have worries you may not be able to raise finance, we are here to help. Since we started in 2010 we have deal with 215 re start Phoenix Companies, all entered a company voluntary liquidation or Administration process.

We have dealt with every event and ensured we could secure funding for their restart businesses. If your company would like a quotation for restart funding simply complete the online enquiry

FAQ’s

How easy is it to get Invoice Factoring after Insolvency

It is very easy, most insolvency's have a story, be honest is the most important factor. The new businesses credit rating will not be strong, but Invoice Factoring relies on your customers credit ratings to fund.

Is Security Required for Invoice Factoring?

Most lenders will require a personal guarantee, this means there are no charges over your home.

Fund Your Business

Speed up your cash-flow today. Forget issues caused by slow-paying customers


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