Sometimes a business can experience highs and lows during the course of its lifetime. It’s not unheard of for companies to become insolvent especially when times are tough like the onset of a pandemic. There are ways however to handle this event efficiently that will be beneficial to all parties.
Hiring insolvency practitioners
who specialize in pre pack administrations can save you time and money and ensure a win-win outcome.Here are 6 advantages of pre pack administration that save creditors from big headaches.
1. Better returns
Insolvency practitioners know all too well the intricate relationship between a company and its creditors. In times of crisis, a pre pack administration can help the business keep on going instead of being shut down and sold piece by piece. Just because a business is struggling, doesn’t mean that it is no longer viable and cannot benefit from a sale. Being able to negotiate a successful sale for the business instead of choosing to liquidate all its assets will result in much better returns.
2. Fast results
A pre pack administration guarantees that a sale can be over and done in a much shorter timeframe than it would be compared to a new business. With the help of insolvency practitioners, the process can be done with just small disruptions in trading which means that creditors don’t have to be left hanging for months on end waiting to be paid.
3. Employees will remain on board
Along with insolvency procedures, business owners will also have to take into consideration how the lives of their employees and staff will be affected. A pre pack administration is a good way of assuring employees that there will not be any drastic changes to their routines and that they will not lose their source of income all of a sudden.
This is because the process allows the company to be sold but arrangements are made so that the employees do not have to be terminated. Instead, they will be transferred automatically and business operations can just continue as normal. This then generates income that is beneficial for creditors.
4. Untarnished reputation
The sale of a company through pre pack administration is not a process that requires a public announcement. This means that aside from being able to continue as a business, the precious reputation that the brand has carefully managed and promoted through the years will not be tarnished or damaged. Having a good brand reputation is an advantage for a business and can even contribute to more sales that will be of good value to creditors.
5. New lease in life
One of the main goals of a pre pack administration is that the business experiencing difficulties will not have to shut down for good. Basically, the company is given a second chance to redeem itself and be able to generate more sales. Experts say that getting this lifeline can drastically increase the chances that a company will be successful in the future.
6. Directors can stay on track to reach their goals
Similar to employees, company directors do not need to be replaced during a pre pack administration. This means that the people who have more expertise in business dealings can stay on.
Bridge Newland has the best insolvency practitioners who make it their goal to save your business from being liquidated. Leave us a message on www.bridgenewland.co.uk or phone us at 0800 612 6197. We’re based in the midlands but cater to any company in the UK.