Financial Difficulties and Their Solutions

Discuss the problems and costs which might arise for  a company experiencing a period of severe financial difficulties. What possible solution you precribed for this?

Sagar from united kingdom

Financial difficulties may be defined as the lack of fund for repayment of loan and other operation of business. There may be many reasons for financial difficulties. Suppose, you have invested money in a project which has failed. Your business earning has been decreased by the economic crisis. Like this, there may be lots of reasons. You can pay its cost by closing your company. Your company may be liquidate after financial difficulties. You can face court penalties and high interest if you delay loan and govt. payments due to financial difficulties. Following may be its possible solutions:

 1.  To Create the Reserve Funds 

In finance, reserve funds are the beautiful solution for all financial difficulties. Suppose, you are interested to get the service of 100 employees. Create the reserve fund for their 10 years salary.  With this, you can easily save the risk of not paying salary in the time when your earning will decrease.

2.  To Take the Service of Insurance Companies 

In the corporate business, there may be lots of financial difficulties. You should try to transfer its risk to insurance company by getting insurance policy. This is also best solution. If you feel loss of profit risk, you can transfer of its risk by taking of loss of profit insurance policy.

3.  Diversify of Your Investment

Never invest your whole money in one project.  After facing financial difficulty, you should never lose your patience. You have low money but if you will use your brain, you can earn high fund from this. Otherwise, you can waste your all money.

4. Countermeasure Detection and Verification 

Finance manager should make  the advance system in fund utilization which will  the ability to not only recognize when movements of loss  occured but exactly from which project  the movements of loss are coming.

5. Debt Restructuring 

For getting relief from financial difficulty, you can take the benefit of debt restructuring ideas. Through this, you can take the meeting with your creditors. You can give the request for delay the time of repayment. It will give you power to find new resources of earning for repayment.