If you are facing financial difficulty, don’t miss our expert insolvency advice for practical steps on what to do next.
When a business faces financial distress, it can be difficult to know what to do next. Should you fight to turn things around, or is it time to close and move on? Understanding your options is crucial, and seeking the support of a trusted insolvency advice service can make all the difference.
At McAlister & Co, we specialise in helping businesses make informed decisions about their financial future. So, whether you want to rescue and restructure your company or close it in the most effective way, we’re here to guide you every step of the way.
Understanding insolvency
A company is insolvent when it can no longer pay its debts as they fall due, or when its liabilities outweigh its assets. If your business is struggling, it’s important to act quickly - delaying action can limit your options and even expose you to personal liability as a director.
The key is to identify your next steps early. The two main paths available are:
1. Business Rescue – If your company has a viable future, a turnaround strategy can help you restructure and continue trading.2. Closure – If your business is no longer sustainable, closing in a structured way can help minimise damage and protect your personal and professional reputation.
Not sure which route to take? That’s where an insolvency advice service like McAlister & Co comes in. We help businesses assess their financial position and determine the best course of action.
The business rescue route
If your company is struggling but has a strong foundation, business rescue could be the right option. Here are some potential solutions:
1. Company voluntary arrangement (CVA)
A company voluntary arrangement allows you to restructure your debts while continuing to trade. It’s a formal agreement between your company and its creditors to repay what you owe over time.
A CVA is a powerful business rescue tool that can stop legal action from creditors and protect your company from winding-up petitions, whilst allowing you to repay debts in manageable installments.
When to use it
A CVA works best for businesses with a steady income and the potential to recover. However, it requires creditors' approval, and you must demonstrate that your company can meet the repayment terms. Learn more about how to apply for a CVA here.
2. Administration
Another business rescue option is administration, a route which can provide your business with legal protection while a strategy is developed to save it.
When you enter into administration, an insolvency practitioner will take control to stabilise the company. Meanwhile, the business can continue trading while different solutions are explored. Ultimately, company administration could lead to a sale, restructuring, or a CVA.
When to use it
Administration is useful for companies facing immediate creditor pressure but with the potential for a turnaround. Learn more about when to consider administration in this blog.
3. Pre-pack administration
A pre-pack administration involves selling the company’s assets to a new business, often run by the same directors. It allows for a seamless transition, avoids disruption to customers and staff, and also preserves brand value and goodwill.
Pre-pack sales must follow strict regulations to ensure transparency, but they can be an effective way to restart without historic debt.
When to use it
A pre-pack administration is a powerful solution for businesses who want to wipe the slate clean and start over.
When closure is the best option
Sometimes, despite your best efforts, the best decision is to close your company and start fresh. If your business is no longer viable, liquidation might be the most responsible option.
1. Creditors’ voluntary liquidation (CVL)
A creditors’ voluntary liquidation is a formal process where the company’s assets are sold, and remaining debts are written off.
There are a number of benefits to a CVL. For starters, the directors remain in control of the process, and it also ensures employees can claim redundancy payments. Plus, it avoids being forced into compulsory liquidation by creditors.
When to use it
If your company has no realistic chance of recovery, a CVL is often the most efficient and professional way to close.
2. Compulsory liquidation
If your company fails to act, a creditor (such as HMRC) may force your business into liquidation through a winding-up petition.
When this happens, the court will appoint an official receiver to liquidate assets, and directors lose control of the process. Unfortunately, compulsory liquidation often leads to a worse outcome for employees and directors.
Being proactive and choosing a CVL over waiting for compulsory liquidation can protect your reputation, finances, and future business prospects.
How McAlister & Co Can Help
Deciding between rescue and closure isn’t easy. Every business is different, and the right solution depends on your unique circumstances. That’s why seeking expert help from a trusted insolvency advice service is essential.
At McAlister & Co, we take a clear, honest, and compassionate approach. We will:
✔ Assess your financial situation and explain your options in plain English.
✔ Develop a strategy to help you move forward - whether that means restructuring or closing.
✔ Handle negotiations with creditors to relieve pressure and protect your interests.
Don't wait until it's too late. If your business is in trouble, get expert insolvency advice today. Whatever your situation, we’re here to help you make the right decision for your future. Contact us today to learn more about how we can help.