If rent cannot be paid, what options does the business have?
In essence, if the company cannot pay its debts as and when they are due, then it is insolvent. This means directors must look at and assess the options available to them:
- Seek a time to pay arrangement on other debts such as HMRC – renegotiate such debts
- Propose a company voluntary arrangement to write off some of the debts and allow an extended period of up to 5 years to pay off the debt
- Raise additional finance (be careful that this does not delay the inevitable and increase you debt)
- Go into administration which allows an 8 week moratorium against any further actions against the company allowing breathing space for the company to be rescued via a sale or additional finance.