More help for small firms in trouble


26-09-2001

A version of the U.

S. 'Chapter Eleven' is to be introduced to the UK for small firms in trouble.



David Irwin, head of the Government's Small Business Service, has just announced the scheme, aimed at giving small businesses suffering from short-term financial difficulties a second chance.



Under the plan, advisers will work as company doctors and put together rescue packages that concentrate on long-term debt management for companies seen as having a realistic chance of survival and eventual success.



The East of England is among the areas chosen for the pilot. Business Link advisers will identify firms running into trouble before they reach the point of no return.



Mr Irwin said: 'I want to change the way the business community behaves towards small firms that experience a cash-flow crisis.



'Too often the liquidators are called in to viable firms due to short-term problems that can be solved. As a result, jobs and livelihoods are lost and the potential that the businesses had to generate wealth is gone.



'Small businesses account for 55 per cent of GDP and 50 per cent of jobs and rarely have the resources to appoint specialists to help them in times of need.'



Some large companies avoid receivership by hiring company doctors to cure their problems. This programme, Mr Irwin says, is intended to offer small firms access to the same kind of advice.