top of page

Navigating Financial Distress



What should you do if your business is in rough financial waters? If you feel financial strain creeping into your business, it is important to take action early to address the situation rather than hoping it improves on its own. Below we suggest some options to help you navigate financial distress.


 

•        Engage with lenders: Communicate transparently with your lenders early on. This will maximise available options and strengthen your relationship. Most lenders are willing to agree to an approach where borrowers are transparent and can demonstrate a plan

 

•        Reach out to suppliers and customers: Have open conversations, where appropriate. Clarity around payment timeframes, late payment fees and other expectations will provide certainty for all parties involved

 

•        Review business contracts: Understand the terms of your business contracts, what obligations are owed and the implications if you default

 

•        Keep directors’ duties in mind: Ensure you are complying with your director duties, including avoiding trading recklessly or incurring obligations the company is not able to perform. You can be found personally liable if you breach your director duties. Maybe you have to make the difficult decision of winding up your business to avoid breaching your duties, and

 

•        Seek professional advice: Speak to your accountant or financial advisor to assess the financial position and solvency of your business. We can also advise on your options at any stage.


If you need assistance with refinancing or reviewing contracts, contact us today on 09 407 7099 or info@lawnorth.co.nz .


_____________________________________________________________________________

DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the author's knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors and do not necessarily reflect the collective view of Law North Lawyers. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2024.


Editor: Adrienne Olsen. Adroite Communications. E: adrienne@adroite.co.nz. M: 029 286 3650

Commenti


bottom of page