Business accounts

[Adam Davies]

Hi
You will need to change accounts because they will close it once your IVA is notified or started.
I presume that you have looked at other options such as a debt management plan ?
Regards
Regards

[littleted]

Was advised that a DMP would take about 10+ years to pay off with my level of debt.

[ellie 553]

Hi littleted - is it a cash only paying in account you need or do you need to be able to take credit card payments?
If its just a paying in account you could get away with opening a standard basic account eg a cashminder account although sometimes there is a limit to how much you can pay in!
Our plan was to get a family member to start up a new card services account and our IP advised she also could open a business account for us to use as long as she wrote a letter to prove it was in name only.
He said this would have been fine as long as we had no credit facilities and we looked into doing this with Abbey as there is a local branch nearby
It really depends on the nature of your day to day business but it might also be worth having a chat with lloyds once you have a plan B as apparently it can be possible to get them to agree to keep the account going and suspend loan payments - I didnt try this myself but this is what our IP told us.
Did you try asking for a payment holiday on the loan until you get this sorted out ?

[BECKY]

I too had a loyds business account , I was sad to lose it but they were a creditor. I opened an account pre iva with Natwest they were fine and Ive had no problems since and im now 20 months in

[Adam Davies]

Hi Littleted
Do you expect your business to grow ot stay the same ? If it is a growing business maybe a DMP wil give you time to build the business upto a point where you can manage your debts.A DMP can be used just for your personal debts leaving your relationship with your business creditors and business bank/loan unaffected.
Regards

[littleted]

Hi Ellie
I haven't asked for a payment holiday on the loan as I'm scared of my manager getting 'wind' of what's going on and I haven't yet made enough arrangements for the business to run fairly smoothly in a new account, and yes I do take a lot of credit card payments as I have a gift shop.
Becky, I take it that Lloyds voted in favour of your proposal?

[MelanieGiles]

Self-employed cases are more complex to set up, and a face to face meeting with the client is a statutory responsibility and absolutely essential to get things right and understand whether the business is able of generating profits to fund IVA contributions.

Given the nature of most businesses, where trading tends to fluctuate over the year, Andy is right that in my practice we allow a much wider window for IVA payments over a quarter rathern than a month. To be frank this is rarely used, as the majority of my self-employed clients prefer to set aside money on a monthly basis, but it allows a little flexibility if necessary.

And creditors are generally amenable to self-employed cases in my experience - indeed this was the original intention behind the creation of an IVA as a positive alternative to bankruptcy - and I cannot remember ever having a self-employed case rejected.

[littleted]

Andy
This is the question that keeps me awake at night!! My business is 8 years established and my turnover will not change too much. I feel like my personal debts (the business services it's loan with no problems) are taking all of my cashflow and as I am a 'seasonal retail business' can sometimes hit a bit of a wall, especially as the debts have built up over a period of time and I don't seem to making any in roads on them. I have managed the debts for long enough I feel, and the whole juggling act along side running a business will send me to an institution! I am in a very tricky position......

[MelanieGiles]

If you are trading as a sole trader or partnership, you will have to include all of your debts into an IVA including those relating to your business. The business only appears to service its loan because you are taking insuffient out of it to service your personal debts. There is simply not enough to go round, and this situation is likely to worsen rather than get better over time.

[ellie 553]

I don't think it would be a bad thing for them to know you are struggling as they won't be able to act (I don't think) until they hear about the IVA from your IP. If you haven't asked for one before then its worth a try as it would be a breather for you to sort a few things out. Unless you have a DTI loan (like me) you have probably got that right if you you have no arrears and have has the account a long time.
As for the credit card facility - ours was down for a week and there is a cashpoint nearby so we just asked people to get the cash out to pay.
You need to have a credit check for card services so it might be worth setting that up now with your new bank - are you an FSB member ? They have given me some good advice and may be able to advise you

[littleted]

Yes Melanie, you're right and that's why I feel it's time to take action and save a good business by getting everything else under control and managable now before I grind to a halt. It's just as you say very complex and I don't know how the hell to deal with half of it

[MelanieGiles]

A good IP who is experienced in proposing self-employed cases (not all IP's do!) will help to take some of the burden away from you and at least be able to analyse your financial situation and give advice on options.

Running a business (I know because I run one too!) can often make you feel very alone, and by simply sharing some ideas with another party can make you feel so much better.

One thing you will need to demonstrate if looking at an IVA as a sensible solution is to have trading projections prepared which indicate the profitablity of your business. These will need to show sufficient profit to firstly meet your general household and personal expenditure, pay your taxes and latterly offer a sum sufficient to persuade creditors to accept an offer.

Your IP will be able to help you with this if you are not good at numbers or presentation. What does your business actually do?

[littleted]

Hi Ellie
I am a member of the FSB and I didn't think about speaking to them!!!! DOH!
I was hoping to switch my card services over to my new account before the IVA as they are not linked to any of my creditors, will this be ok?

[littleted]

Hi Melanie
I have a gift shop with a turnover of about 100k. My accountant is very supportive and we work together for pojections ect.

[littleted]

And yes, I have been feeling very isolated and alone. I am under a mountain of pressure