In today’s unpredictable economic climate, even the most established businesses can face financial difficulties.
Whether it’s due to rising operational costs, market shifts, or unexpected disruptions, companies may find themselves navigating unfamiliar and often overwhelming territory in the form of restructuring & insolvency.
At McAlister & Co, we believe that knowledge is power — and that understanding your options is the first step towards recovery. In this blog, we’ll explore what business restructuring & insolvency really mean, outline the key processes involved, and explain how we can help you take back control of your business’s future.
What Is Business Restructuring?
If your business is facing insolvency, restructuring is the process of reorganising a company’s structure, finances, or operations to improve efficiency and viability. It is often used as a proactive measure to avoid insolvency or as part of a rescue strategy during financial distress.
Restructuring might involve renegotiating debts with creditors, closing unprofitable divisions or locations, refinancing or sourcing new investment, and reshaping leadership teams or operational models. Crucially, restructuring can provide breathing space for businesses to reassess their strategy and find a sustainable path forward.
What Is Business Insolvency?
Business insolvency occurs when a company is no longer able to pay its debts as they fall due, or when its liabilities exceed its assets — a position known as balance sheet insolvency. It’s a serious financial state that requires immediate attention, as directors have a legal duty to act in the best interests of creditors once insolvency is recognised.
Common signs of insolvency include persistent cash flow issues, mounting creditor pressure, late payments to HMRC, difficulty paying staff wages or suppliers, and legal action or CCJs from unpaid creditors. Recognising these warning signs early and seeking expert advice can make all the difference in the outcome for your business.
Restructuring & Insolvency Options
When your business is under financial strain but has the potential to recover, restructuring offers a vital opportunity to regain stability and rebuild. At McAlister & Co, we support you through every stage of this journey, helping you to make informed, confident decisions that align with your goals.
1. Seek Professional Support
The first and most important step is to speak to a licensed insolvency practitioner. Restructuring is a complex process that involves legal, financial, and strategic considerations — so it’s crucial to get expert guidance from the outset. Our team at McAlister & Co will provide a clear, honest assessment of your business’s situation and outline all the available options.
2. Create a Business Recovery Plan
Once we've assessed your business, we work with you to develop a tailored recovery plan. This typically includes:
- Immediate actions to reduce financial pressure
- A realistic budget and cash flow forecast
- Debt management strategies
- Long-term goals to restore profitability
This plan serves as a roadmap to help steer your business back on course and gives stakeholders — including creditors and investors — confidence in your intentions.
3. Cut Operational Costs
Reducing costs is often a critical part of restructuring. We'll help you review all areas of expenditure and identify opportunities to cut back without compromising the core of your business. This could involve streamlining staffing, renegotiating contracts, closing loss-making divisions, or switching to more cost-efficient suppliers.
4. Manage Cash Flow Effectively
Strong cash flow management is essential for business survival. We’ll help you put robust systems in place to monitor income and outgoings, chase unpaid invoices, and manage your payment terms more effectively. Where appropriate, we’ll also explore financing options such as invoice factoring or asset-based lending to ease short-term pressures.
5. Deal with HMRC
HMRC debts are a common issue for struggling businesses, but it's important to remember that help is available. We can support you in negotiating a Time to Pay (TTP) arrangement with HMRC, allowing you to spread your tax liabilities over an agreed period. A successful TTP agreement can ease pressure and buy you valuable time to implement your recovery plan.
6. Consider a Formal Rescue Procedure
If informal restructuring measures are not enough, a formal rescue process such as a CVA or pre-pack administration may be the best route forward:
Company Voluntary Arrangement (CVA)
A CVA is a legally binding agreement with creditors that allows you to pay back a portion of your debts over time, while continuing to trade. What’s more, it also allows for continued trading while repaying your debts.
Administration
Administration offers legal protection from creditor action while a licensed insolvency practitioner takes control and works to rescue the company, sell the business, or achieve a better return for creditors than liquidation.
Pre-pack Administration
Similarly to administration, pre-pack administration is a fast-track sale of the business to a new company, often involving the same directors, allowing you to preserve jobs and retain valuable assets.
Restructuring Plans (under Part 26A)
For more complex financial arrangements, this court-sanctioned plan allows you to restructure liabilities and even bind dissenting creditors.
7. If Recovery Isn’t an Option
In some cases, even with the strongest recovery efforts, closing the business may be the most appropriate course of action. If this happens, we’ll be by your side every step of the way, helping you navigate the process with clarity and confidence.
This might involve entering a creditors’ voluntary liquidation (CVL), enabling you to wind down the company in an orderly and responsible manner. Alternatively, a compulsory liquidation or formal dissolution may be more suitable. Whatever the route, we’ll ensure you remain compliant with your legal duties while doing everything we can to safeguard your personal position.
Restructuring & Insolvency Advice from McAlister & Co
Facing financial difficulties can feel isolating, but you don’t have to go through it alone. At McAlister & Co, we specialise in restructuring & insolvency, helping businesses across a wide range of sectors regain control and find the best possible outcome.
Here’s how we support you:
- Expert Assessment – A clear review of your financial position and practical solutions tailored to your situation.
- Bespoke Strategies – Whether it's informal restructuring or formal insolvency, we help you make the right choice.
- Licensed Practitioners – Legally authorised to guide you through all procedures with complete transparency.
- Compassionate Support – We understand the pressure you’re under and provide a steady, reassuring hand throughout.
Restructuring & insolvency might sound daunting, but it’s not the end of the road — in fact, it can be the beginning of a new, more sustainable future for your business. Acting early and seeking professional advice increases your options and improves your chances of success.
So, if your business is under pressure, don’t wait for things to get worse. Contact McAlister & Co today for a free, confidential consultation and take the first step towards stability and recovery.