Finance your business in difficult times

Prepare to deal with financial difficulties in your company

If you are unable to pay your bills on time, your business has a liquidity problem. Maybe because your turnover has decreased, or you are spending more than you are earning. Investigate what you can do to resolve your liquidity problems:

• Make sure the starting point is clear. Only hard facts and figures can tell you what the reality is. Keep your business records up-to-date and accurate. Perhaps you have already drawn up an estimate of the yearly turnover and sales. These will provide a quick and clear insight into your situation.
• What are the unique selling points of your product or company? What sets you apart from your competitors? And have you done market research to find out what your customers actually expect from you?
• Seek help and advice. Contact your municipality, KVK or other organisations that offer help. These organisations employ people who talk to entrepreneurs with financial worries on a daily basis. They will help you think through the steps you can take to solve your financial problems. Is your business still viable? Or does it need restructuring?

How do you finance the approach to your financial problems?

A loan or credit is not always the solution. An external adviser can help you evaluate your product’s marketing. Or the viability and financial structure of your company. A marketing campaign can help to draw attention to your products.

Look at internal and external options

A restart must be financially feasible. Sometimes you can free up the necessary resources from within your own business. Do you need money from outside the business? Then refinancing existing loans is an option. This can be done through a bank or one of the alternative sources of financing. And perhaps you can apply for social assistance for the self-employed (Bbz).

What if the debts are too large?

Even if your business is doing well, it can be difficult to pay the interest and repayments on debts. In that case, it may be better to restructure your debts. This means that you make agreements with your creditors to repay less. This is often better for the creditors than bankruptcy, because then they may not get their money back at all. See the Debt Flowchart for an overview of debt arrangements.

Who can you talk to?

Do you want to discuss your situation with someone? You can contact the KVK Advice Team for advice, but also for referrals to other organisations, such as:

• Ondernemersklankbord OKB (Sounding board for entrepreneurs, in Dutch), a national network of experienced ex-business owners and specialists who help you review your business and management with a critical eye. The advisers work as volunteers and ask you to become a donor of the OKB foundation.
• MKB Doorgaan (SME continue, in Dutch), a national organisation that helps SMEs and zzp’ers whose business is viable at heart. They help keep the business healthy. The first consultation is free of charge.
• Municipalities execute the Financial support for self-employed professionals scheme, Bbz. This scheme can support you via a loan or by supplementing your income to the level of a welfare benefit.
• Your accountant or bookkeeper already knows your company. This makes them a good discussion partner if you want to find out what your options are.

Tips

• Keep your administration up-to-date and accurate. That way, you know how your product and company are doing.
• Take a good look at your debtor management. Improve your processes, for example by requesting a receipt confirmation. And check the status of invoices before the payment term has expired. You will often get paid sooner.
• Wasting time could be your worst mistake. Do not wait for the bank to reclaim your credit, or for a supplier to repossess your inventory. Get help and stay in charge of your business.
• Are you unable to pay your employees’ wages? Notify the Tax Administration of your company’s insolvency. The Employee Insurance Agency UWV may take over part of your payment obligations.
• Always file tax returns in time. If you cannot pay your taxes, report your insolvency for taxes and premiums to the Tax Administration. This will prevent the Tax Administration from sending you an assessment with not only an estimate of what you have to pay, but also a fine.
• Visit the KVK Zwaar Weer Routewijzer (in Dutch). Answer a few questions. And find a step-by-step plan that suits your situation.