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In The Spotlight
- Family debt advice business scoops Franchisee of the Year award
- Dundee-based brokerage wins Business of the Year award for debt solutions
- One advisor, two debt management referrals and over £600 commission
- Former mortgage packager tells of transition to award winning debt advisor
- EuroDebt and mortgageforce partnership goes from strength to strength
January surge for business debt advice
Monday 8th February 2010The 31st of January is marked with a big red cross in the diary of hundreds of thousands of self-employed peoples’ diaries because it represents that last ditch saloon to file your tax for the previous year and make the next payment on account. Or that’s how it is meant to work. The CCCS have confirmed a 78% rise in debt helpline calls between December 2009 and the end of January 2010.
Laura Carver said: “We have received thousands of calls from self employed and sole traders over the past year and heard a lot of stories of people struggling to manage their personal debts while running a business.”
The Office for National Statistics (ONS) reported at the end of November 2009 that there were 1.03 million employees and self-employed people working part-time because they could not find a full-time job. This is the highest figure since records began in 1992 and it was up 46,000 on the previous quarter. Loss of income is the number one debt reason why people start a Debt Management Plan with EuroDebt Financial Services.
Kevin Still, Director of EuroDebt, commented: “Many people become self-employed not through choice, but through changes in circumstances in their employment. Those that are genuine sole traders or small businesses have probably found new business difficult to find through the recession, with the cold weather not helping those dependent on traveling or working outside. Client retention can be very fraught, with late payment by trade debtors a recurring problem for your cashflow.
“If you are small then suppliers may be tightening the credit terms they offer you and SME lending by banks has become a source of major concern with overdraft facilities and working capital funding being pulled. As a result we have seen rising credit card debt or borrowing in a personal capacity to keep the business afloat leading to serious personal and business debt problems.”
Mr Still added: “Separating the two is important and that is why we work with Business Recovery specialists alongside a Debt Management Plan or IVA that we may put in place to deal with the personal debts.”
Recent findings from the Federation of Small Businesses’ study will cause concern that company bosses are putting their own credit rating and personal solvency at risk for the sake of their business.
In the study of 10,000 firms, 41% of company directors had dipped into personal savings to keep their business going, whilst 21% had used a personal credit card.
It has been estimated that the number of white-collar workers seeking debt solutions such as Individual Voluntary Arrangements (IVAs) and debt management plans (DMPs) will continue to rise this year.
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