When a company cannot pay everyone, the law decides who gets paid first. Knowing the broad order helps you understand where a business loan and other debts sit.
Secured and priority claims first
Certain secured creditors and specific priority claims — including some employee entitlements — generally rank ahead of others. The exact order is set by insolvency law, not by who shouts loudest.
Then unsecured creditors
Unsecured creditors, which a business loan with no security would typically be among, rank behind priority claims and share in what is left. Because a Credicorp loan takes no personal guarantee, the claim sits against the company, not the director.
Why it matters before insolvency
Understanding the order is a reason to act before insolvency: an arrangement while the company is still trading almost always produces a better outcome for everyone than a distribution afterwards.
Take specialist advice on where specific debts rank in your situation.
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: What happens to my loan if the company becomes insolvent?, What happens to employees if a company cannot pay?, Understanding business insolvency options.