With all of the recent events that have taken place at MG Rover, two Midlands based Birmingham Chamber experts are asking the question - is it time for companies to restructure their finances?
Richard Wood, managing director of Barnett Ravenscroft Financial Services and Martin Coyne, senior partner of Poppleton & Appleby look at the options available for directors and owner managers of companies?
Company directors usually turn to their bankers for assistance with lending, overdrafts, associated and related insurance policies.
However, alternative finance options with such players as Close Asset Management and Mercantile Credit are available.
Mr Wood said: "The alternative options include factoring, discounting and asset funding, often referred to as FDA.
"By going down the FDA route more flexibility is offered than the banks and usually without the higher amount of protection and guarantees.
"And very often a loan secured on the company's debtor book can be arranged without personal guarantees."
Projections confirm that the FDA marketplace is set to grow by £30 billion over the next five years.
And for directors that feel factoring and discounting is an expensive proposition it is a matter of choice and personal circumstances really.
For someone that has an overdraft facility of £100,000 paying around two per cent above base rate and their house secured against it, together with personal guarantees in place to the bank, in the current climate it may well now be a viable option for consideration.
All of a sudden invoice discounting for example looks attractive when removing the overdraft facility, the personal guarantee and the charge on the private property.
By restructuring and refinancing the existing debt, it may be possible to raise more money - and in some cases even look at other areas that could potentially raise funds, such as pensions.
For example by utilising equity in a directors home the loan can be agreed at a lower rate of interest than on a commercial basis and without a personal guarantee in place.
When directors and owner managers reach a certain age they have probably built something that they can lend against, and don't realise that it might just be what they need to get them over a particular hurdle.
Mr Coyne said: "So with restructuring and refinancing it's essentially putting protective measures in place, including private debentures, so that when directors have to put money into their businesses they can actually protect themselves against potential loss.
"The rationale behind our thinking is that we recognise that most people, and certainly people of a particular age, don't want insolvency, unless there's an inevitability about it.
"What we have to accept is that there may be certain companies, and I had a classic example of this recently where a company that we were dealing with became insolvent because of a similar situation where a big customer failed and nobody had really expected it.
"What happens is, you find that the whole supply chain has an interest in what's going on. In the particular case I'm talking about, they had lost £300,000 to another company but it was an eminently profitable business. What they had was a hole in the balance sheet but they needed to plug it.
"We put an administration procedure in place and talked immediately to all the suppliers and customers. The customers really just wanted no disruption and the suppliers needed an outlet. For them to lose this company's business was actually more of a problem to them.
"In this particular case the creditors agreed to accept 50p in the £1 and the company was handed back to its management team when they came out of administration.
"You can use what is seen as a restructuring procedure for administration purposes. It is not really an insolvency procedure and I think we have to get over this hurdle of thinking of insolvency all the time."