Author: Glenn

A management buyout keeps the business in familiar hands. The team that already understands customers, systems, and culture steps into ownership, which reduces disruption and protects service quality. For founders, a management buyout allows a planned transition with clear handover milestones and an agreed role after completion if required. This continuity reassures clients, employees, lenders, and suppliers, and helps the company maintain momentum during and after the deal.

Compared with a trade sale, the process is usually more focused and confidential. The buyer group already knows the business, so diligence can be more efficient, with fewer surprises and a smoother negotiation. Pricing can be structured to reflect real performance, for example through staged payments linked to agreed targets, which helps both sides feel that the value is fair and achievable.

Ownership aligns incentives across the team. Managers become investors in outcomes, not only delivery, which encourages sharper decisions on margins, cash flow, and growth priorities. Equity participation helps retain key people and can support a wider share scheme, building a performance culture that rewards contribution. The result is often a more agile business with clear accountability and faster execution.

Funding can be tailored to the business. A mix of bank debt, vendor financing, and private investment can be designed to suit cash generation and risk appetite. Earn outs and warranties can protect both seller and buyer. With the right preparation, including robust management information and tidy legal housekeeping, a management buyout can deliver a clean exit for the owner and a confident new chapter for the team.

Why cash flow matters
Profit is important, but cash pays wages, suppliers and loan repayments. Even strong businesses can struggle if money arrives late. A few disciplined habits around invoicing and collections can shorten the time it takes to get paid, reduce borrowing costs, and create headroom for growth.

Set clear expectations upfront
Agree payment terms in writing before work starts, including due dates, late payment interest, and accepted payment methods. Send a simple welcome note that restates these terms, introduces your invoice format, and gives a named contact for queries. Clarity at the beginning prevents disputes later.

Invoice fast, invoice accurately
Raise invoices as soon as a milestone is met or goods are delivered. Include purchase order numbers, full descriptions, and your bank details. Errors cause delays, so use templates and a final pre-send check. Where practical, take deposits for bespoke work and split larger projects into staged invoices.

Make paying effortless
Offer more than one way to pay, for example bank transfer and card. Add a payment link on every invoice and email. Encourage direct debit for recurring fees, which reduces admin and failed payments. If customers require supplier onboarding, complete it early so nothing blocks the first invoice.

Adopt a calm, consistent credit control rhythm
Create a weekly timetable for reminders, starting a few days before the due date. Use friendly wording, provide the invoice again, and ask if there are any problems processing payment. Escalate politely after set intervals and log every contact. Consistency, not confrontation, gets results.

Know when to escalate
Pause further work if terms are exceeded, agree payment plans for good customers in temporary difficulty, and consider professional recovery for persistent issues. Good cash flow is built on clear processes, dependable follow-up, and the confidence to hold the line.

Banks must now give 90 days’ notice before closing accounts, giving customers more time to respond.

Since April 2026, new government rules strengthen protections for individuals and small businesses at risk of unfair bank account closures. Under the legislation, banks and payment service providers are required to give at least 90 days’ written notice before closing an account or terminating a payment service, commonly known as debanking. A significant increase from the previous 2-month limit.

Banks are also required to provide a clear explanation for the closure, allowing customers to challenge the decision including through the Financial Ombudsman Service. These changes are designed to protect customers, particularly small businesses, who have often found their accounts shut down without notice or reason, leaving them unable to operate or seek alternatives.

The new rules form part of the government’s wider Plan for Change, aimed at delivering economic security and supporting growth. The rules came into force for relevant new contracts agreed from 28 April 2026 onwards and also apply to the termination of basic personal bank accounts.

There are exceptions in cases where closure is necessary to comply with financial crime laws. Existing protections which prohibit a bank from discriminating against a UK consumer based on political opinions or beliefs remain in place.

Trustees must manage assets, follow tax rules, and register with HMRC where required.

A trust is a legal arrangement in which a trustee, either an individual or a company, is entrusted with managing assets such as land, money, or shares on behalf of others. These assets, placed into the trust by a settlor, are managed for the benefit of one or more beneficiaries.

Trustees are responsible for deciding how the trust's assets are to be managed, distributed, or retained for future use. They are also accountable for reporting and paying any tax due on behalf of the trust. If the trust pays or owes tax, it must be registered with HMRC.

Income received by a trust is subject to varying rates of Income Tax, depending on the type of trust.

Discretionary (or accumulation) trusts: Trustees pay tax on the trust's income. The first £500 is taxed at the standard rate. Income above this threshold is taxed at:

• 39.35% for dividend income
• 45% for all other types of income

Interest in possession trusts: Trustees are similarly responsible for paying tax on income. The rates are:

• 8.75% for dividend income
• 20% for all other income

There are additional trust structures, for example, bare trusts and settlor-interested trusts, which are subject to different rules and tax treatments. As a result, it is essential to consider both Income Tax and Capital Gains Tax (CGT) implications from the outset when establishing or managing any type of trust.

SMI loans can help pay mortgage interest for those on benefits, but repayment is due when the home is sold.

Support for Mortgage Interest (SMI) is a government-backed loan provided by the Department for Work and Pensions (DWP) designed to assist homeowners receiving certain benefits in covering the interest on their mortgage or home loans. The loan is intended solely to help with interest payments on a qualifying mortgage or home loan, and repayment is typically not required until the property is sold, or ownership is transferred.

Interest on the loan is charged monthly using compound interest which means that the total amount owed will increase over time. Despite this, the SMI loan may still be a more affordable alternative compared to borrowing from banks or credit unions.

Before applying, individuals are advised to assess their financial situation. SMI may not cover the full mortgage payment and so applicants may still need to pay the remaining balance. Those who have missed payments, are managing other debts, or share ownership with someone not included in their benefit claim should seek professional advice prior to applying.

Eligible applicants may borrow against up to £200,000 of their mortgage if they receive working-age benefits, or £100,000 if they are on Pension Credit, this can increase to £200,000 in certain transitional cases. For joint mortgages, entitlement may be limited. There is no credit check for the SMI loan, so applying will not affect benefits or credit scores.

To apply, individuals must complete an SMI application form. However, it is recommended that they explore all available options first, including discussions with their mortgage lender and support services such as Citizens Advice.