Debt Management: A Path to Peace of Mind

“I don’t think we should think of debt as a negative thing. Most of us use debt in our personal lives to buy a house or the buy a car, so it improves our lives. It’s a positive thing: it enables us to buy a home or own a car and in the same way, the correct use of debt will help a business grow faster, can help a business’ profitability… Debt isn’t all bad” (Donald Forsyth, Partner, Saffray Champnes)

Newly Formed Business group the Highland Business Partnership (HBP) has teamed up with the industry leading Association of Scotland’s Self-Caterers (ASSC) to run an online expert led panel session on debt management and refinancing options for business owners.

The pandemic has been a challenging time for everyone.  For some of the most affected sectors, we can look forward to a (hopefully) busy period ahead, as visitors start to return to our beautiful region.

Business owners may, however, not be looking ahead to the leaner winter months, when revenues are much reduced and mounting debts have to be repaid.

HBP/ASSC believe that now is the time to plant a seed of thought – debt management and financial planning – before it is too late for some. It is important to face up to the challenges ahead and to facilitate conversations for operators to be honest with themselves and their supply chain partners. We hope that this session will assist people in navigating through the coming years.

Small businesses are currently being supported to some extent by grants, furlough payments for employees and government backed loans but the financial support schemes are due to come to an end in the autumn and with the onset of repayments for CIBLS and BBLs, the risk of insolvencies increases at that stage. The webinar’s aim is also to facilitate small businesses approaching restructuring in order to survive and grow post crisis.

The session is chaired by Fiona Campbell, Chief Executive, ASSC & John Murray, Highland Business Partnership

Speakers and panellists include –

• John Murray, Co-Founder, Highland Business Partnership

John has been involved in the Food & Drink Sector for over 30 years now – initially running a wholesale Fruit & Veg and distribution business, and then moving on to own and operate 15 convenience stores throughout the Highlands. After selling the stores, he worked with Scotland Food & Drink for 2 years – covering the Highland’s & Islands – growing their membership by 80% within 14 months. Currently involved in the creation and development of the Highland Business Partnership and Highland Food & Drink Club – Watch this space !!!!

•  Allen Munro, Associate Director, Deal Advisory, Restructuring, KPMG

Allen is an Associate Director based in the Aberdeen office of KPMG’s Scottish Restructuring practice, specialising in corporate insolvency and restructuring advisory work.  Born and raised in Ardgay in Sutherland, Allen trained as a chartered accountant in Inverness and retains close links to the area.   He also holds the joint insolvency examination board qualification.

Allen assists businesses with cash management, financial projections, stakeholder management, business rescue, accelerated transactions and insolvency and has experience of many sectors, including oil & gas, construction, property, hotels / licensed trade and manufacturing.

KPMG is Scotland’s market leading Restructuring practice, with the largest and most experienced team of turnaround professionals. We work with businesses of all sizes in a variety of sectors.

•  Donald Forsyth, Partner, Saffray Champnes

Donald is a partner in Saffery Champness LLP, chair of the Institute of Directors in the Highlands & Islands, a non-executive director of a natural resources business, and chair of a national Scottish charity. He is a regular contributor to the business press.

Donald was brought up in a family food & drink business and works extensively in the sector. He relocated to the Highlands in 2015.

•  Margo McLenan, Director, McLenan Corporate

Margo has been working in business recovery and insolvency services for more than 30 years.  She spent most of her career at a Big 4 firm before setting up her own practice.  Her experience as an owner Manager has given her considerable insight into the issues faced by individuals running their own business.

Margo is keen to improve the business rescue culture within the SME market in Scotland and consider that it is only as a measure of last resort that a business should enter a formal insolvency process.  She particularly enjoys working with directors to find solutions to the financial challenges their companies may be facing and likes to take a partnership approach in these situations and take great satisfaction in seeing companies return to profitability. However, where a business is no longer viable winding up a company may be the best option and Margo is fully licensed to act as an Insolvency Practitioner in such situations.

• Michael Thomson, Director, Bank of Scotland

Michael has over 28 years of retail and commercial banking experience in his career with Bank of Scotland as a Relationship Director. In his current role, Michael looks after the financial requirements of SME’s across the Highlands and Islands with a turnover between £10m and £25m. Understanding the needs of business owners, managing their financial risks and supporting their ambitions to grow has been a key priority. Having lived and worked across the Highlands and Island, Michael has experience of managing companies across a full range of sectors.

In addition to his role in the Bank, Michael is also a committee member of the Institute of Directors and a Director of the Great Wilderness Challenge Ltd, a charity raising funds for local good causes.

Questions put to the panel:

• What would you say are the signs for a small business that should prompt directors or individuals to seek the advice of an insolvency practitioner?
• Are there organisations where businesses and individuals can seek free debt advice?
• How would you suggest businesses approach creditors?
• Do you consider debt consolidation to be a good way for businesses and individuals to repay debt? What other methods of managing credit and loans would you suggest?
• When should businesses and individuals approach their bank?
• Should businesses consider other ways of restructuring debt? What might that restructuring look like for a small business?
• Is there anything industry can or should be doing to alter government policy for example in relation to the repayment of government backed loans? Please give a brief overview of the BBLS Pay as You Grow scheme.
• Is there anything industry can be doing going forward to monitor the potential to lose businesses through insolvency?
• How can trade representatives assist businesses with debt going forward. Where should industry be signposting businesses for debt management?
• Do you think there should be less stigma for the management of debt? How can trade /industry representatives work with debt and insolvency practitioners to cut through the silence surrounding debt and better raise it as a matter to be addressed early?

Watch the video here.