Financial troubles and debt happens to consumers but also companies as a whole. When a company is in a debt situation it is usually with large amounts of money and can in some cases cause the company to close down. To avoid this happening, it is important for companies to know what financial help is available for them.
Although debt counselling under The National Credit Act only applies to natural persons, juristic persons such as companies have their own form of financial help prescribed by The Companies Act. This means that companies that are over-indebted can also seek out financial help in order to restructure their debts.
Financial help for companies encompasses similar processes as financial help for natural persons in that it restructures the debts of the company in order to reduce payments and interest rates through negotiations with creditors. This allows a company the opportunity to widen their profit margin and prevent insolvency whilst still meeting their debt obligations.
More than 400 businesses have turned to financial help since the act came into effect with more than 80 specialists in financial help for companies setting up shop. This points to the fact that not only consumers are facing the debt axe, companies need these remedies as well.
In order to qualify for financial help, a company should be in a position where they will not be able to meet their debt obligations for the next six months.
If a company is facing massive debt problems it should consider enlisting financial help under The Companies Act in order to put an end to debt and regain their footing on the slippery debt slope.