Should you trade through a liquidity crisis? A liquidity crisis will occur when a business has a lack of cash required to grow, can't meet its debts when they are due or pay for day-to-day operations causing it have debt problems. Some businesses choose to “trade through” a liquidity crisis in the hope of finding additional cash flow and avoiding the need for debt management advice. This often involves delaying payments to creditors, granting security, taking additional borrowings, selling assets and improving receipts from customers. When a liquidity crisis occurs it is vital that the stakeholders accurately and objectively take debt advice to see whether the business is viable and ultimately can succeed with the injection of further cash to stave off insolvency. The decision whether to “trade through” a liquidity crisis or become insolvent is quite possibly the most difficult and complex decision any management team have to take.
October, 2008
Unemployment rises heaping more worry on those in debt
The number of people out of work in the UK is likely to continue to rise, official figures will show.
The figures will show an increase of at least 30,000 people unemployed to 1.75 million, the TUC has stated.
An extra £100m has been made available, by government, for re-training workers who may lose their jobs as a result of the economic slowdown.
Crunch puts pressure on those in debt
The latest news will be a blow to many people with debt problems and people struggling to make debt repayments.
The number of people unable to maintain debt repayments is likely to increase in line with the predicted rise in unemployment.
The official rise in the unemployment rate is up from 5.3% to 5.5%, and the number of people claiming Jobseekers Allowance is up by 32,500 in August to 904,900.