Air conditioning companies struggling with insolvency
The recession has affected all sorts of businesses. In Britain we have been predicted a long hot summer. Great news you might think for the Air Conditioning Industry, well things are not all rosy.
Many air conditioning supply companies are struggling at the moment. the problem is that air conditioning is an expensive product.
Imagine if you can that you are a landlord of a large old building. You mat have changed the building into serviced units. these are rented to small businesses, on a monthly rental.
In this hot summer your tenants want cool air to work in. What do you do? Can you afford to have air conditioning? It could cost you ten’s of thousands to have it installed. In the current climate who is going to lend that money to you? The banks might, but they will probably require a personal guarantee from you. Do you really want to be exposing yourself to personal liability? Probably not that is why limited company protection exists.
However if you don’t spend the money and get the cooling system put in you may find that the tenants have voted with their feet and taken space in a place that is air conditioned.
Alternatively if you are a business and you own your own building, you have the same concerns. You need to keep your employees comfortable in the weather, but can you afford to make capital expenditure, at a time when it is hard enough to pay the wages of the staff you have. It is very difficult.
This makes it very hard for a business such an air conditioner, who should be raking in th money in weather such as we are predicted, but the economic situation means that they suffer like the rest of the economy.
This scenario has already lead to a number of air conditioning companies taking steps to seek insolvency protection via administration.
The administration process is ideal as it helps a company in a bit of a financial mess, to take stock of it’s situation. It could re-align its staff requirements, change it’s stock purchase so that it carries less stock and retains more cash. It will also allow a proposal to be made to creditors to ensure the continued survival of the business. Unfortunately some creditors may not be paid in full, but at least they will receive something and the rump of the business will continue on.
So in this hot weather, instead of being jealous of all the work that it will mean for air conditioning companies, consider that like the rest of us, they to may be struggling.
Information provided by Steve Thatcher of Help With Debt (UK) Limited and total debt solutions company.
For all further reading see http://www.helpwithdebtuk.com for personal contact email sthatcher@helpwithdebtuk.com
For Steve’s thoughts see http://steves-debt.blogspot.com
Finally if in the UK and you need a friend to speak to call 01162171406
