Insolvency is the point at which a company can no longer pay its debts as they fall due. If your company reaches it, here is where the loan stands.
The loan is a company debt
The Business Loan is owed by the company. In an insolvency process — administration, liquidation or a company voluntary arrangement — it becomes one of the company's claims, dealt with alongside other creditors under the statutory rules.
No personal guarantee means no automatic personal liability
Because we take no director personal guarantee, the loan does not automatically become the director's personal debt if the company fails. The director's exposure is governed by company and insolvency law, not by a personal promise to us.
Take advice early
If insolvency is a real possibility, get specialist advice quickly. A licensed insolvency practitioner and free services can explain your duties and the options. Talking to us early may also open a rescue arrangement that avoids formal insolvency altogether.
See the boundary between a cash-flow gap and genuine insolvency 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: What if my business is insolvent or considering administration?, The difference between insolvency and a cash-flow gap, Is my company insolvent, or just short of cash?.