
Understand your company's position and learn more about the options available
Require Immediate Support? Free Director Helpline: 0800 644 6080
Free Director Helpline: 0800 644 6080
Updated:
If you are unable to keep up with the repayments on a business bank loan, you should check the terms and conditions carefully to see if you could be held personally liable for repaying the borrowing. While limited companies are afforded the protection of limited liability making them solely responsible for their own debts, some lenders do ask directors to sign a personal guarantee as additional security for the loan. This could make directors liable for a business bank loan should the company not be able to repay.
If your company is struggling to make the repayments on a loan it is taken out, this should be seen as a huge warning sign that all is not well with the company's finances. A temporary squeeze on cash flow is relatively common, however, if the financial difficulties your business is experiencing threaten to be longer-term in nature, swift action should be taken to protect your company, its creditors, and its directors from a slide into insolvency.
The good news is that there area range of rescue and recovery options available which could help you turn the situation around. Restructuring measures can help improve the financial and operational efficiency of your business, allowing your more time and space to repay what you owe in an affordable manner, while also reducing financial wastage going forwards.
If you cannot pay your business bank loan, taking advice from a licensed insolvency practitioner can help reduce spending by downsizing operations, reassigning duties to maximise staff efforts, and introducing technology to improve the efficiency of the business.
Free 60 Second Test
For Ltd Company Directors
What are you looking to do?
Choose below:
Once you default on a business loan, this will trigger a series of collection efforts by the bank to recover the money they are owed. These escalate in terms of severity, so taking action to bring your account up to date or otherwise come to a mutually-agreeable repayment plan, should be seen as a matter of urgency.
“I completed the simple on line form, received the free guide by email immediately and then a call from Tom who was so very helpful. Highly recommend this service”
Pauline Whitehead
Is your company insolvent?
If your company is insolvent you have a number of legal responsibilities that you must adhere to. Taking steps to protect creditors from further losses by contacting a licensed insolvency practitioner can help ensure you adhere to these duties.
The team are available now - 0800 644 6080
Get a Quote Find Your Nearest Office
Can’t pay CBILS or Bounce Back Loan?
Don't worry - there are thousands of other company directors in the same position. If you are struggling to keep up with your Covid loan repayments, speak to a member of the Real Business Rescue team to discuss your options. It's Free & Confidential.
The team are available now - 0800 644 6080
Depending on the overall financial and operational health of your company, you may be able to refinance your existing bank loan for a channel of funding more suitable for your business and its needs.
Refinancing a business bank loan may work out to be a cost efficient option and a quick way to pay off your commercial loan if you are struggling to raise funds. If you are able to source a cheaper option than your current loan, refinancing can help minimise current debt, replacing it with a slightly cheaper debt.
By refinancing, you may be able to find a better deal with reduced interest, longer payment terms and free up money to pay off your debt. One of these options may be to secure a form of invoice finance.
What is invoice finance?
There are two types of invoice finance options; invoice factoring and invoice discounting.
Invoice finance can be used to speed up cash flow after a service has been provided or goods delivered. Once an invoice has been issued, the cash tied up in the outstanding invoice will be released by a lender. If you have completed a large sale and you are awaiting payment from the customer, invoice finance allows you to access funds quicker.
The differences between both invoice finance options are as follows:
Invoice Factoring – Once the service has been provided and the invoice has been raised, the lender will transfer majority of the balance to your company. Once the customer makes payment, this will be received by the lender, who will then transfer an agreed amount to your company, excluding fees and charges. The lender will have majority control over the collection of the debt from the customer.
Invoice Discounting – Once the service has been provided and the invoice has been issued, the lender will pay majority of the balance to your company. Once you receive payment from the customer, you will retain an agreed amount and the remaining balance will be sent to the lender, including agreed fees and charges. You will have full control over the sales ledger and the collection of the debt.
The funds can help meet repayment for your commercial bank loan, saving you in late payment fees, interest and a termination of contract from the banking facility. By accessing the funds quicker and bridging the gap between the sale and payment received, you will be able fulfil your payment duty to the bank. We deal with over 50 finance lenders, so we can put you in touch with an invoice finance provider, helping to quickly improve cash flow.
If your company is struggling with unmanageable debts, squeezed cash flow, or an uncertain future, you are far from alone. We speak to company directors just like you every single day, and we are here to give you the help and advice you need.
Call our team today on 0800 644 6080
If the business is on the road to insolvency, simply refinancing may not be enough to help your company escape the problems it is facing. In this case, you may need to consider entering into formal insolvency proceedings to either rescue your company, or else wind down its operations in an orderly manner if it beyond the point of rescue.
If your company is juggling a range of creditors as well as the bank - such as suppliers and HMRC - you may be able to enter into a company voluntary agreement (CVA). A CVA allows you to formally negotiate lower terms with creditors if you believe that your business can be profitable again. It can protect against any legal action that can be taken against you by creditors, halting the pressure and allowing for some breathing space.
If, however, your business's debt problems are insurmountable, placing the company into a voluntary liquidation process could be the best for all parties. Voluntary liquidation by way of a Creditors' Voluntary Liquidation (CVL) will protect your creditors from further losses, allow them to recover as much as possible following the liquidation of company assets, while also ensuring you are adhering to your legal obligations as the director of an insolvent limited company.
At Real Business Rescue, we have a team of licensed insolvency practitioners in our nationwide network of offices, who can look into the best option for your company if you are struggling to pay a business bank loan. If you would like to explore invoice finance options or discuss restructuring, call our experts today to arrange a free no-obligation consultation.
Still unsure whether liquidation is right for your company? Don't worry, the experts at Real Business Rescue are here to help. Our licensed insolvency practitioners will take the time to understand the problems your company is facing before recommending the best course of action going forward based on your own unique circumstances.
Complete the below to get in touch
For Ltd Company Directors
What are you looking to do?
Choose below:
We provide free confidential advice with absolutely no obligation.
Our expert and non-judgemental team are ready to assist directors and stakeholders today.
Understand your company's position and learn more about the options available
Find your nearest office - we have more than 100 across the UK. Remote Video Meetings are also available.
Free, confidential, and trusted advice for company directors across the UK.