Administration is a formal insolvency process designed to rescue a company as a going concern, or to get a better result for creditors than an immediate winding-up would.
A protective moratorium
Once a company is in administration, an administrator takes control and a moratorium generally stops creditors taking action while a plan is worked out. The aim is breathing space to rescue or realise value in an orderly way.
How borrowing is treated
Existing debts, including a business loan, become claims dealt with by the administrator under the statutory order of priority. Lenders cannot simply pursue the company outside the process during the moratorium.
Consider it before it is forced
Administration is a serious step, but considering it early — with proper advice — can sometimes preserve more of the business than waiting until the position is hopeless. It is one tool among several.
See the wider menu of insolvency options in the guide below.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: If a company is wound up or goes into administration, Understanding business insolvency options, What if my business is insolvent or considering administration?.