Many small-business owners have put themselves at risk of personal insolvency in an attempt to stave off workforce redundancies and company liquidation, according to new figures from insurance provider More Than.
The insurer claims that one in ten have remortgaged their own homes to inject capital into their struggling business, and in particular to retain staff while still being able to pay their wages.
Janet Connor, managing director of More Than, says: “It’s sad that so many small-business owners have had to remortgage their homes and take hefty pay cuts but, at the same time, it shows real compassion on their part.”
In terms of pay cuts, the study found 70% of owners who have had to make savings have lowered their own salaries by half – and 5% have stopped drawing a wage completely.
However, some are making prudent decisions that reduce their risk of company liquidation without risking personal insolvency.
A fifth (21%) are cutting back on marketing, 12% have relocated to smaller premises to reduce their overheads and 7% have sold off stock at reduced prices to maintain cashflow.
Our insolvency practitioners can help whether you are facing personal or company insolvency, with a wealth of experience in the insolvency advice Manchester’s businesspeople need to keep their finances in order during difficult economic times.