The recent quarterly rent deadline for many businesses could have put some struggling tenants even closer to entering into company insolvency arrangements.
R3 – the Association of Business Recovery Professionals – regularly warns of the risks posed by quarterly rent deadlines, as they demand a lump sum from tenants rather than spreading out their payments.
President Lee Manning adds that the upfront nature of rent payments can make it particularly difficult for firms when going into administration.
This is because administrators may only use the premises for a short time, but must pay upfront as though they were planning to stay in place for the next three months.
When company insolvency strikes, a more understanding approach to those going into administration might prove beneficial not just to the owners, but also to the people to whom they owe money.
Mr Manning says: “A business sold as a going concern by an administrator will almost invariably recover more for creditors, and save more jobs.”
However, for those hoping to survive for the long term, quarterly rent deadlines are likely to remain a significant concern for some time to come.
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