If your company has reached or is approaching insolvency — whether you are considering a Company Voluntary Arrangement (CVA), entering administration, or being wound up — you should notify us as soon as possible. Once a formal insolvency procedure begins, the conduct of your loan facility passes into the hands of the appointed practitioner and our direct contact with you as director may become restricted. Early disclosure gives both parties the best chance of an orderly outcome.
What to tell us if you appoint an insolvency practitioner
Tell us the name and firm of the IP you have appointed or are in discussions with, the procedure being considered (administration, CVA, liquidation), and the expected timeline. We will then liaise directly with your IP regarding the status of your facility. You should not make payments to us unilaterally once an IP has been appointed without their instruction, as this can constitute a preference and expose the payment to challenge.
Secured versus unsecured position
The treatment of our facility in an insolvency process depends on whether it is secured and the nature of any security taken. Your loan agreement will set out the security position. Unsecured creditors are generally in a lower priority class than secured creditors, HMRC preferential claims, and the costs of the insolvency process itself. Your IP will provide a creditors' report explaining the likely distribution, if any.
CVA and restructuring
If your company proposes a CVA, we may be invited to vote on the terms as a creditor. We will review the proposal on its merits. A CVA that offers a credible return and keeps the business trading is often preferable to liquidation for all parties.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee required. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: How do I tell Credicorp my business is struggling?, What happens if my company misses a loan payment?.