Help with financial difficulties - Help And Support | Ulster Bank

Managing your business debt

We understand the challenges

Get in touch


For general enquiries, call your Business Team on :

  • 1850 211 690 
  • or if calling from abroad 0044 2890 538459

Lines are open 8.30am - 5.30pm  Monday to Friday - note calls may be recorded

What should you do?

We understand that customers may find themselves in financial difficulty for a wide variety of reasons.

Lower income, higher costs and cashflow pressures can be a challenge for many businesses and can cause customers to experience difficulty in meeting their financial commitments.

Often these can be dealt with easily however if ignored can be damaging. That's why it's important if you find yourself in this position to seek help as soon as possible.  

  • Don't ignore the problem - it could effect your credit rating

  • Act fast - the key is to act quickly and take action

  • Contact all your creditors and keep them informed.
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Our approach

We have a commitment to support customers who are experiencing or facing financial difficulty under the Central Bank of Ireland's SME Lending Regulations.

 

If your business is at risk of going into arrears, its important to contact us as soon as possible for help.


We understand that each SME's individual financial circumstances are different and need to be assessed on their own merits.

 

Download our information booklet here.

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Call us now

General enquiries

1850 211 690 (Republic of Ireland)

0345 366 5592 (UK)

Or if calling from abroad 0044 2890 538459

Lines are open 8.30am - 5pm  Monday to Friday - Note calls may be recorded

What are the SME Lending Regulations?

In December 2015, the Central Bank of Ireland published a revised Regulation for Business Lending to Small and Medium Enterprises called the SME Regulations. The SME Regulations set out new requirements for lenders when dealing with SMEs who are facing or in financial difficulty. This code was effective from 01 July 2016.

The objectives of the regulations are:

  • To facilitate access to credit for sustainable and productive business propositions
  • To promote fairness and transparency in the treatment of small and medium enterprises
  • To ensure that when dealing with financial difficulties cases, the aim of a regulated entity will be to
  • Assist borrowers to meet their obligations, or otherwise deal with the situation in an orderly and
  • Appropriate manner.

 

Find out more on the Central Bank website.

If you are concerned about your personal debt, please click here.

Support for handling financial problems

Most businesses will experience financial difficulty at some stage.

If you can recognise the signs and understand what may lie ahead, you may be able to anticipate and avoid certain financial problems going forward.

So to help you, here's some information, important for Start Ups and smaller businesses on managing finances and cash flow.

What kind of financial problems can occur?

Every business has different challenges, but there are a number of familiar scenarios.

 

These include:

 

  • Initial underfunding - this is a common problem often due to underestimating the cash required
  • Insufficient sales and/or inadequate profit margins - essentially, if you can't sell enough products with the right profit margin it won't be able to pay it's way
  • Rapid but poorly planned growth - sudden expansion can require investment long before the associated revenue comes in
  • Too much money tied up - cash invested in non-liquid assets, such as stock or machinery, may leave you short of cash
  • Late payment - poor invoicing and debt chasing processes can be really costly.

The common factor in all of the above is a shortage of available cash.

 

These cash flow problems can even afflict businesses that are doing well by other measures such as sales.

What are the warning signs?

In order to survive, the money coming into a business every month, plus any reserves and loan facilities must at least match your outgoings.

 

So make forecasts for the months ahead, and look at sales and expected cash flow.

 

If they begin to fall below forecasts, you should take immediate action.

 

Regularly ask yourself the following questions:

 

  1. Are sales falling?
  2. Are you losing market share?
  3. Is your reputation suffering when compared to your competitors?
  4. Are you being forced to borrow more in order to cover operational costs?
  5. Is it becoming increasingly difficult to pay creditors?

Tackling cashflow problems

If the warning signs are there, act quickly.

Initially, problems may not seem that serious. Sales may be slightly down or the cash coming into the business may not quite meet the outgoings.

The business carries on as normal in the hope that next month’s cash flow and sales figures will improve. However, if figures don’t improve, the business could find itself inundated with demands from suppliers and it may be difficult to pay staff.

If the problems aren’t resolved then the result can be insolvency. The key is to be pro-active with measures that will put your business back on an even keel.

What should I do?
By spotting the early warning signs, you will be in a much stronger position to put things right.

If the time-delay between the raising of an invoice and the customer paying is causing cashflow problems, there are a number of possible solutions. These include:

• Focus on winning business that will generate cash quickly.
• Tighten credit control. Make sure invoices are sent out on time. Chase payment when it becomes due.
• Consider factoring or invoice discounting arrangements, where cash is lent to you by the bank as soon as an invoice is raised.
• Keep track of the financial health of your customers and suppliers.
• Change payment periods.
• If there is no real chance of sales improving, then you should consider other measures such as selling assets, cutting staff and reducing costs and/or inventory in order to free up cash.


Talking to your bank 
Make the time to regularly talk to your bank. For instance, if your problems are caused by a lack of available finance due to overly rapid growth, a bank is more likely to provide the funds if the problem is identified early and brought to its attention.

If your financial situation threatens your ability to meet existing repayment obligations, banks are more likely to be sympathetic if you talk to them early and present a credible business plan.

The one thing you should never do is trade while insolvent. If the company runs out of cash, then it is illegal to take orders from customers or take goods on credit from suppliers. There are serious penalties for breaking this rule.

Trading whilst insolvent

The one thing you should never do is trade while insolvent. 

If the company runs out of cash, then it is illegal to take orders from customers or take goods on credit from suppliers. There are serious penalties for breaking this rule.

However, the definition of insolvency is complex and it’s not always easy to know when you’ve crossed the line. If in doubt, seek advice from your lawyer or accountant. If you are insolvent, the next step may be administration.

Administration and involuntary arrangements
Administration occurs when a company’s financial difficulties prompt creditors, stakeholders, or sometimes the directors themselves, to apply for a court order to begin the process.

While it sounds drastic, administration needn’t be the end of the road. Under the recently enacted Enterprise Act, the accountants who take over the running of a company in administration have a duty to do all they can to return the business to operational health.

A variation on the theme is administrative receivership. This occurs when a creditor or lender has a claim on the company’s assets to cover non-payment. In these cases the role of the receiver is to recover assets for that particular creditor.

One useful means of getting through a period of crisis is to reach a formal agreement with creditors under a Company Voluntary Arrangement (CVA). Under these agreements, creditors and the company agree a legally enforceable recovery plan. Once a CVA is in place, creditors can’t sue for repayment for an agreed period of time and the company has time to recover.

Similarly, sole traders with debts of less than £5000 can apply for an administration order, which will allow them to pay the courts an agreed monthly sum that will be divided among creditors.

Next steps

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Alternative Sources of Finance

Sometimes traditional Bank finance is not always accessible or appropriate.

 

We have signposted organisations that could offer you support.

Find out about additional support
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Where else to get support

There are other independent organisations that also provide free confidential practical advice and support to help you, including the Citizens AdviceAdvice for Debt NI and PayPlan.  
 

Details of how you can contact these organisations and other sources of free advice can be found at the Money Advice Service website.

Get in touch We're here to help
Call our dedicated team
Call us now

General enquiries

1850 211 690 (Republic of Ireland)

0345 366 5592 (UK)

Or if calling from abroad 0044 2890 538459

Lines are open 8.30am - 5pm  Monday to Friday - Note calls may be recorded

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