A crucial supplier was refusing to provide new stock until their outstanding invoices are paid. Due to temporary liquidity problems, non-payment had now stretched to 150 days. There was a real threat that the supplier would terminate its contracts and hand the matter over to their lawyers. Without new stock, the business had little chance of continuing to trade and with the added expense of legal proceedings there was a strong likelihood that the company would collapse.
A positive way forward
Corporate Guardian sources a lump sum loan to cover half the outstanding invoices. This placates the supplier and enables negotiation of payment terms to cover the balance. A watching brief is established on behalf of the supplier to ensure that promised payments are made and that future invoices are settled on time. The supplier agrees to continue to provide stock and the business is able to resume trading.
What to do if you receive a Creditor’s Statutory Demand
You will receive a Creditor’s Statutory Demand if you have an inability to pay your creditors, which poses substantial business risks. Not the least being the risk to directors of trading while insolvent, but the prospect of expensive legal proceedings, and the loss of supplier relationships that are essential to your business.
In many instances, we are able to source the funding you need and to negotiate with your creditors on your behalf. This can ease the pressure, enable you to survive a period of business downturn or liquidity problems and to trade your way back to profitability.
You can find out more about how to handle a Creditor Statutory Demand, without charge and without obligation, by calling 1300 788 788 or by filling out the short enquiry form below.
Please note: These scenarios are intended to illustrate the type of problems that our clients experience and the possible remedy. They are not intended to portray real companies or real case studies.
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