INSOLVENCY ARTICLES
Early Debt Warning Signs For Businesses
The warning signs for businesses can include those discussed in the last article of the Insolvency series for individuals. Again, problems generally don’t happen over night and you should watch for these signs early on. The key to working through financial
issues is to recognize them early and seek advice while you still have different options available to you.
In 2007, the areas of businesseshit the hardest by insolvency issues included the construction, retail trade, transportation and warehousing industries.
To understand your business’ financial situation, answer the following questions to see if there are warning flags:
- Are you always at the maximum on your operating lines?
- Are you using personal assets to finance or inject cash into the business?
- Are you under-financed and using operating cash to finance long-term assets?
- Are you using funds collected on behalf of third parties to finance operations i.e., GST and source deductions?
- Are you having personal problems at home that are affecting your business?
- Have you lost a key customer or employee?
- Do you have recurring losses?
- Do you lack a proper business plan, budget or cash flow?
- Are you facing major litigation?
- Have there been actions taken by creditors – landlord seizures, garnishee of bank accounts?
- Have you had significant assessment or reassessment by Canada Revenue Agency?
If these questions do sound familiar for your business, your best option is to contact a Trustee to seek professional advice early, to understand what your options are. Many businesses face similar situations, but there are solutions to help you get back on track.
Contact Information
Donna Carson,
CGA, CIRP, Trustee is a Senior Vice President with Meyers Norris Penny
Limited in Calgary, AB. For more information, call Donna at
403.538.3187. Consultation calls and meetings are free and
confidential.
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