Advice needed

nattybee_2

Hi, really need some advice
i own a small business and at the moment really struggling.
We have money owed to us by a contractor 40k who are dragging there feet paying and another person who is paying in a couple of weeks.
my problem is, ive not paid myself since February and all money has now ran out for personal bill and mortgage. next ones due to go out on Tuesday
is there any short term help you can get, any benefits?
I'm really starting to panic now as have never missed a morgage payment.
thanks in advance
Natalie

Premier_2

How on earth have you got to the point of extending credit to one customer for £40k alone when you say you are pennyless??? :eek:

Take control now!

Hit those phones Monday, if not before, and see what you can get by way of immediate payment, even if it's only part payment.

Or see if you can get anyone to factor the invoices for you.

patman99

Don't forget that you can also charge 8% interest on the whole amount owed if even just part of it is over-due.

On Monday calculate how much is owed by each overdue client with the interest added (from the day after the bill became over due to present), then send them a 'notice before action' with the amount due and a timescale of 7 days to pay in order to avoid Court action. Send this by 1st Class Recorded Delivery and await the sudden deposit of the cash in to your account.

paddyrg

If the money is past due according to your agreed terms (and terms can be dreadful, one high-street pharmacy can take 105 days from invoice, and you can't invoice without a PO, etc), then you really are after some urgent kind of invoice factoring. Factoring is a bit of a dud deal in that you may lose say 15% of the invoice value (or much less for good, regular clients), but you get cash in your bank much sooner.

Talk to your business bank manager pronto - show them the paperwork, ask them if they can extend a small line of credit against the invoices, and let their in-house factoring/debt-chasing arm take over the debt. You will need that paperwork to be in order, mind.

Savvy_Sue

Also talk to your mortgage co before you default ...

Mistral001

Cash flow problems just go with being in business. Talk to bank and/or mortgage company.

Also talk to your accountant. They might come up with suggestions of what to do in this cash flow problem as I am sure some if not many of their clients have had similar problems over the course of their business lives.