Howard Jones: However it is not necessarily unlawful or immoral to trade whilst in debt, if there is a reasonable expectation that the income will be generated in due course to meet those debts. This is how a great many businesses are funded, especially where the income is largely generated some time after costs have been incurred.

Yes, that's exactly how a lot of businesses operate. When I ran my own business, I had to operate that way for quite a while before I was able to build up a sufficient financial cushion. I was buying air tickets, hardware, software, paying for hotels and other transport for my staff, and paying my staff and consultants monthly (30 days after invoicing for the consultants). Clients (often FTSE 100 listed companies) rarely paid me on 30 days....most strung out payments to at least 60, and in some cases longer, which meant I was continually in actual debt, though with a "reasonable expectation" that the income would appear later. In fact, several years later I was forced to liquidate the business after a large client suddenly went bust owing me several hundred thousand pounds, which I had "reasonably expected" would be forthcoming.