Company debt is fairly common but presents a serious challenge for a business.
It’s also the main reason that directors come to us for assistance. Debt can arise for a variety of reasons. We’ve listed some common and other less common reasons for debt issues:
- A major client has been placed into administration or liquidation and owed the business a significant sum.
- Rapid expansion has resulted in a business taking longer than expected to pay back its initial investment.
- A problematic project has run up additional, unexpected and significant costs (especially common in construction).
- Increases in price of suppliers / raw materials.
- Other businesses are moving into the market and are operating at a loss in order to take market share.
- Customers are not buying as much as they used to previously due to the economic situation.