Personal guarantee with finance company

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  • Building and projects company
  • Expended £200,000 in R&D
  • Suffered a large bad debt
  • Main dealer vehicle finance outstanding with PGs


A specialist building and projects company had traded successfully for 10 years but had over spent on R&D on an innovative product which was attracting early sales interest.

This put pressure on cash flow which became acute when a supplier let the company down on a large contract and the company had to step in and spend £100,000 to put faulty work right.

The problem

Debts built up which could not be paid and our client took the decision to try to sell the business. She wanted to return to professional work and given this did not want bankruptcy.

The solution

We marketed her business on and received interest in the concept arranging a sale of the business with a consideration payable on a percentage of future sales. Knowing the area and local property contacts we identified a purchaser who had a special interest in the property and paid a premium value to her. Rather than the equity that premium and the payments linked to turnover over a period of three years were sufficient to fund an IVA on her debts which creditors accepted.

The difference

Through our local contacts we were able to dig her out of a difficult situation obtaining value for the business and assets which would ordinarily have been abandoned. Discretion and discussion with the creditors enabled the IVA to be approved. She was able to return to her previous professional work with no publicity regarding her failed business venture. Everyone is entitled to dream and some dreams don’t come true but knowing that it might be possible to return to your previous livelihood should make trying to pursue your dream less risky.

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