Use our traffic light system to self-diagnose your situation:
Green - go ahead but keep under review
- You are not losing money and do not need any credit
- You can't pay creditors in accordance with normal terms but they
continue to provide credit and services subject to interest charges and
late payment penalties - You can pay current tax but you have tax arrears. You have agreed a
schedule with the HM Revenue to pay off those arrears - You have to increase your overdraft facility to take a new loan in
order to pay your creditors near enough on time
Amber - proceed with extreme caution
- You can't pay creditors within agreed terms. They have put you on
stop but have agreed to give you longer to make proposals to pay - You can only get limited credit from new sources and you are using
this to fend off your existing creditors - You can't accept new orders because you can't get raw materials or
pay for the overtime required to fulfil them - Your bank has decided to claw back your overdraft facility and you
are missing payments to non-essential creditors. Your bank wants you
to agree to an independent business review - Creditors are threatening legal action
Red - stop and seek professional advice immediately
- You are on stop with key suppliers, cannot raise working capital to
fund your order book and turnover has dropped to below break even point - Your income will not meet your outgoings once interests and penalties
are taken into account - County court claims, CCJs and statutory demands regularly land
on your doormat - You are having sleepless nights and are on medication to steady
your nerves - You have received notice of a winding up petition