Despite a consistent fall in corporate insolvency figures in the years leading up to 2016, the number of accountants approaching Corporate Strategies – part of the Leonard Curtis Business Solutions Group (LCBSG) – requiring specialist advice on cost-cutting and business restructuring for clients remains high.
Subsequent corporate changes often involve implementing a redundancy programme in response to reduced order levels or to make working practices more efficient. Sometimes sacrificing some jobs to save others is the only viable way to stay in business. However, for many, the cost of redundancies is often the main obstacle.
One way to obtain the necessary funds to make recently increased statutory redundancy payments – and stay in business – is with financial assistance from the Insolvency Service’s Redundancy Payments Office (RPO).
Corporate Strategies (CS) is a specialist in RPO applications and has enjoyed a 100% success rate. The team works collaboratively with accountants and their clients to develop the strongest cases to help secure these loans, which are paid directly to redundant employees from the National Insurance fund.
Essential criteria to make an application include the business being able to:
1. Continue to trade after roles are made redundant
2. Save some of its workforce by making some roles redundant
3. Demonstrate it can repay the resultant debt in full
4. Show evidence that it has been refused a loan by its bank
5. Provide documents to support it has no funds from which to make the redundancy payments itself
6. Confirm that it has undertaken all possible cost-saving exercises
If it’s part of a wider group, it would also have to provide evidence that there are no funds within other divisions to contribute to redundancy costs. It would also have to provide the RPO with a corporate cross guarantee.
RPO case study overview #1 – secured by CS
A Yorkshire-based manufacturing company with a turnover of £25 million and loss-making division approached CS for assistance to deal with statutory redundancy payments totalling £340,000.
CS worked in collaboration with the company’s accountant and management team to develop a loan application that was subsequently approved. Manageable repayment amounts were agreed over a three-year period resulting in 82 jobs being saved.
RPO case study #2 – secured by CS
Advisors for an engineering company based in Lancashire approached CS following the loss of a major contract.
It had a turnover of £2 million and faced redundancy costs of £15,000. CS made a successful RPO application and negotiated a 12-month repayment period saving 45 jobs.
For further information visit http://corporatestrategies.co.uk, email hello@corporatestrategiesplc.com or call 0800 002 9969.