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For instance, it’s common sense for builders, scaffolders and cement pourers to be classed together under construction but what about a travel agent and a security guard?

Or a car leasing company and a landscape gardener? Or an employment agency and a bouncy castle hire business?

They all come under the seemingly disparate title of administrative and support businesses which is a broad umbrella title that covers amongst others: 

So now we know which sort of businesses we’re talking about - how did they collectively manage during the year of lockdowns and afterwards?

Less is more

The initial figures show that in the year leading up to the first lockdown being implemented - Mar 2019 to Feb 2020 - there were 1,798 insolvencies involving businesses in the administrative and support sector. 

The immediate 12 months afterwards - Mar 2020 to Feb 2021 - saw 1,421 administrative companies close. 

Although this is 377 less, it’s still larger than might have been expected considering the temporary halt on creditor actions like winding up petitions and the range of additional support made available to businesses over the past 18 months.  

1,421 is a larger number than the losses reported by the hospitality and retail sectors, which were most popularly believed to be the worst affected in the pandemic with 1,378 hospitality companies and 1,355 businesses in the retail sector becoming insolvent. 

According to official statistics supplied by the Insolvency Service, there have been an additional 358 insolvencies in the administrative sector since March this year which takes the total number since lockdown to 1,779 - which is 118 a month or 29 a week shutting their doors. 

Did bounce back loans soften the blow?

The coronavirus jobs retention scheme or furlough, did help a lot of administrative businesses keep staff rather than forcing them to be made redundant. 

As the travel industry ground to a halt and nightclubs and other sectors that would usually require security staff didn’t need them, administrative businesses with no income needed support and quickly. 

The bounce back loan scheme and CBILS was rolled out for just such a purpose and these companies made use of it. 

The number of loans taken out by administrative services was 102,946 - more than the collective borrowing of the manufacturing, real estate and transportation business sectors. 

The total amount borrowed was £3 billion, which is an average borrowing amount of £29,141 per company.  

Under the most conservative official estimates, it’s expected that 15% of the total lent to the industry would remain uncollected would be £450 million but if the default rate rose to even 40% then this figure would also grow to £1.2 billion. 

You can still close your company even if you have bounce back loan arrears - find out how

Since pandemic restrictions began to be lifted, administrative businesses can begin trading again and supplying their valuable services to customers but there are storm clouds gathering on the horizon

The furlough scheme is finally being wound up at the end of September which means businesses either have to bring their furloughed workers back on full pay or implement redundancies. 

Any bounce back loan or CBILS arrears will continue to grow if they’re not being paid and any outstanding VAT arrears from their suspension in 2020 are now due too. 

Creditors will also be able to begin to take action to reclaim unpaid debts from September 30th too, allowing them to seek statutory demands and winding up petitions if not paid within 21 days of receipt. 

Chris Horner, Insolvency Director with said: “Administrative businesses have had one of the worst hands dealt to them during the pandemic and lockdown. 

“A lot of them didn’t qualify for any support other than bounce back loans and repaying these could become one of the biggest challenges businesses face this and next year if they aren’t able to trade like they did before. 

“The travel industry is still in flux to put it mildly, hospitality and nightclubs are just reopening but will need to comply with new rules and regulations shortly with little guidance being given to their security on how they will be implemented. 

“The shakeup in the commercial property sector will have big knock on effects for cleaning and landscaping businesses that service them so will make their financial forecasting nearly impossible to predict too.

“One thing administrative and service businesses can do is adapt and adapt quickly so they can use their talent and experience to take advantage of the little time left before September 30th and get some professional advice on how they can help themselves before so many rules change.

“A recovery strategy can work but only if it’s created and implemented now. This can include managing any unsustainable debt including bounce back loan arrears, VAT arrears or CBILS.”

A lot of people thought that by the end of September 2021, if not business as usual, we’d be at a stage of business getting back to usual. 

But for many companies and sectors - especially administrative and support businesses - it really isn’t. 

Debts have increased, more are appearing and the last protections from creditors are days away from being removed. 

There could still be a practical way forward for a business in this position but only if they take the first step and get in touch to arrange some practical, professional advice

We offer directors and business owners a free, initial consultation to set out their position and once we get a full understanding of the issues we face, we can work with them to create a strategy to meet and defeat these challenges. 

But get in touch today because after September 30th, the choices might be harder still. 


Technically it’s supposed to be the summer holiday season but we’ve seen precious little of that. 

The main headlines this month see a few well-known firms in the construction industry entering administration while others look to close efficiently through liquidation.

How bounce back loan repayments can affect sole traders and partnerships too 

KEO Films pre pack deal
The TV production company KEO films co-founded by presenter and chef Hugh Fearnley-Whittingstall has been bought out in a pre pack administration deal by Passion Pictures after declaring itself insolvent. 
KEO films produced popular and award-winning shows such as “Hugh’s War on Waste '' and “Easy Ways to Live Well” and described itself as having a strong ethical brand reputation. It’s latest acclaimed documentary series to screen was “Once Upon a Time in Iraq” broadcast by the BBC. 
The directors declared they were unable to put enough money into the business to maintain it as a going concern with the impact of the coronavirus proving terminal. 
The deal has secured 20 jobs in the business and the new owners are voluntarily looking to repay as much of the debts KEO films owed to creditors before it went into administration. 
Will Anderson of KEO Films said: “We are trying to do the right thing in a difficult situation and are trying to come to arrangements with people where we can.”
While not all of the old company’s debts could be repaid, the new owners have made offers to repay the majority of freelance employees in full.
Hugh Fearnley-Whittingstall stepped down as a director once the deal had been completed but continued to make programmes with the company under the new ownership.

Formaplex pre pack administration
Formaplex - a major manufacturer with four sites in Hampshire - which supplied lightweight plastic components to the automotive, motorsport, aerospace, medical and defence markets was bought out by new owners this month in a pre-pack administration
The 20-year-old business was rebranded as Formaplex Technologies by its new owners and 110 posts were lost during the process.
A spokesperson for the ownership group said: “While positive progress had been made, to secure the long-term future of Formaplex, the business needed to take further steps to strengthen its balance sheet.
“As a result, Formaplex Ltd was placed into administration and we agreed to purchase the business and assets of the company from the administrators on the same day through a procedure known as a pre-pack administration. 
“There has been a seamless transition of customers and employees to a new business, Formaplex Technologies. We have secured the support of all the major customers and an experienced new CEO has been appointed.”

Minster construction closes
Mansfield-based Minster Building Company went into administration with 26 staff losing their jobs. 
First formed in 2007, Minster specialised in constructing supported living facilities for vulnerable citizens but due to delays in planning and construction processes due to the pandemic combined with price increases in building materials meant that most of their current projects became significantly loss-making. 
All work ceased on their various work sites from the East Midlands to the North East.
A spokesperson said: “It’s a great shame that a long-established construction business has been laid low by the knock on effects of the Coronavirus crisis. 
“Not only have jobs been lost and suppliers left nursing substantial losses, but the vulnerable people who would have been housed in the properties being built by the Company will suffer as a result of the inevitable delays in completing these projects.
“The UK construction sector is facing acute difficulties as a result of the pandemic and the severe disruption it has caused to its operational processes, supply chains and labour resources. Sadly, Minster will not be the last failure in this vital industry.”

Garrandale, an engineering company based in Derby, has gone into administration
The 45-year-old business began designing equipment to help streamline manufacturing in the automotive, healthcare, oil and gas sectors. In the 1980s they began manufacturing production equipment for railway carriages and continued progress working with companies such as AEA Technology and Bombardier working on a system that prevented train wheels from slipping.  
The company’s expertise was also sought to help build the Hadron Collider and work on the Ariane space rocket used by the European Space Agency but has now officially gone into administration with the loss of approx. 70 positions. 

AM Griffiths
AMG or AM Griffiths based in Wolverhampton appointed administrators earlier this month. 
The business, founded in 1899 by Arthur M Griffiths, was profitable as recently as 2020 and worked on many private and public sector projects including building many schools and hospitals and was responsible for many major landmark buildings across the Black Country.
The company was unable to secure additional work and has ceased trading altogether with the loss of 60 permanent positions.  

Six Day Series
Madison Sports Group, which staged the popular Six Day cycling series in London, Manchester and locations abroad went into administration as Covid-19 forced the cancellation of all their planned live events. 
A spokesperson said: “Madison Sports Group and Six Day are prime examples of companies with solid business models whose difficulties have been greatly exacerbated by the fallout from Covid-19. 
“With the majority of sports events closing down completely over the past year and a half, both companies' revenue generating capabilities have decreased markedly.
"Following the financial year-end and as a result of Covid-19 events have had to be postponed due to the health concerns of athletes, staff and guests and it is not possible to quantify the impact on the business, creating a material uncertainty over its future prospects.” 
Six Day launched in London in 2015 with cycling stars such as Sir Chris Hoy and Mark Cavendish and has taken the format to other major cities with other stars but the enforced halt of all activities was too much for the business to survive. 

Simtom Foods
The Indian sauces manufacturer first founded in Leicester in 1977 has gone into administration with the loss of almost 100 jobs. 
The business produced a range of traditional Indian foods for both supermarkets and the foodservice industry and while they had invested heavily in recent years, growing their operations, the loss of business caused by the Coronavirus pandemic and recent labour shortages placed significant pressure on the company leading to the appointment of administrators. 
A spokesperson said: “The pandemic significantly impacted the implementation of Simtom’s strategic plans. 
“Our immediate priority is to support employees made redundant so they can make claims via the redundancy payments office and looking for potential buyers for the business.”

Glenburn Hotel
The Glenburn Hotel, built in 1843 on the Isle of Bute and billed as Scotland’s first hydropathic hotel, has closed and gone into administration with all staff being made redundant.
The hotel overlooks Rothesay Bay and was popular with businesses and holiday makers alike due to its location and extensive facilities.  
The administration has primarily been caused by significant operating costs, coupled with the fall in revenue due to the Covid pandemic whilst still having to meet significant maintenance and running costs. 
A spokesperson said: “Unfortunately, having explored all its options, the hotel was unable to survive the significant fall in revenue caused by the Covid-19 pandemic whilst still having to meet significant maintenance and running costs. 
“We will now focus our efforts on assisting employees, many of whom have worked at the hotel for many years, to submit their claims for redundancy and other sums due to them whilst preparing to market and sell the hotel. 
“Whilst this is a sad day in the Hotel’s history, this is an outstanding opportunity to acquire an iconic hotel on one of Scotland’s most accessible islands.”

A Grantham based manufacturer has gone into administration with the potential loss of 100 employees. 
Fruehauf was founded in 2010 and produces a range of tipper and rigid trailers, quality control systems and techniques. 
Administrators are considering several options including a company voluntary administration (CVA) as well as a potential sale to any interested parties. 
Freuhauf produced around half of the tipping trailers sold in the UK and ongoing delays to orders had already led to a major trailer shortage across the entire supply chain. 
The business will continue to trade while in administration but this situation might exacerbate delays.

Kapex Construction
Newcastle based Kapex Construction which was involved in a number of high profile schemes in the city has appointed administrators. 
The business launched in 2016 to work on various housing schemes throughout the North East of England and employed 62 people directly last year. 
The company was recognised by RICS for its work on All Saints Church, an 18th Century Grade 1 listed building which was on Historic England’s Heritage At Risk Register.
The business was in profit in 2020 but the cessation of building work for the majority of the previous 18 months has proven insurmountable. 
O’Keefe Construction
O’Keefe Construction based in Greenwich has entered a company voluntary arrangement (CVA) with its creditors after suffering significant losses in the financial year to May 2021. 
The business employs 178 has operated in London and the South East for over 50 years but took professional advice following severe cash flow challenges and are pursuing a CVA to continue trading while they restructure their debts. 
A spokesperson said: “A CVA will secure the company’s future as a going concern and allow it to continue to service its ongoing clients. 
“Crucially, a CVA will also maximise the returns to the company’s creditors, compared to alternative restructuring procedures. 
“On a successful approval of the CVA proposal, the company’s shareholders will contribute additional sums to support its short term cash flow and to ensure the business has increased liquidity levels. 
“The financial restructuring afforded by the CVA, alongside operational improvements made to the business, will ensure that O’Keefe is well placed to complete its ongoing and profitable work and to fulfil its client needs.”
CEO Patrick O’Keefe said: “The board was tasked with delivering the business out of the current difficulties and after taking specialist advice, has agreed to enter into a CVA to allow this mechanism to secure the long term success and profitability of the business.
“Thanks to our exceptional staff, our current portfolio of jobs is trading very well. The conclusion of the CVA process will immediately put the business on a positive footing.”
“The directors are optimistic regarding the future success of the company in view of the significant forward order book and improving project margins.”


We’re now into the last third of the year and what might be the most crucial month for businesses to get help and make essential decisions to secure their future for the rest of 2021. 

September will see bills and debts continue to mount, the furlough scheme finally coming to an end,  CBILS and bounce back loan repayments continuing to come due, defaults rising and the ban on creditor actions such as winding up petitions being lifted.

The time to get advice and hear what options your business has to manage its debt obligations including VAT arrears or bounce back loans is short so the best time to get in touch with us is today.

We’ll better understand your situation and be able to give you recommendations you can act on immediately to set plans in motion that will give you and your business the best chance of getting into 2022 and then working towards your medium and longer term goals. 

Before any of that can happen though, you need to take action - the sooner the better - because for some companies, the end of this month will be too late.  


The report found that although essential, the government’s overall response to the pandemic had exposed the taxpayer to significant financial risk for the foreseeable future and that while departments faced difficulties in responding quickly to the pandemic, these risks did not always achieve good value for money. 

The committee singled out the bounce back loan scheme as one of the programmes with a high level of risk reporting an estimated £26 billion of credit and fraud losses uncovered so far. 

Dame Meg Hillier MP, Chair of the Committee, said: “With eye-watering sums of money spent on Covid-19 measures so far the government needs to be clear, now, how this will be managed going forward, and over what period. 

“The ongoing risk to the taxpayer will run for 20 years on things like recovery loans, let alone the other new risks that departments across government must quickly learn to manage.

“If coronavirus is with us for a long time, the financial hangover could leave future generations with a big headache.”

Among the main conclusions and recommendations in the report are:

The report also highlighted the work of the National Audit Office’s (NAO) Covid-19 cost tracker which tracked expenditure and costs across the whole of government and pulled them together in one place. 

The NAO are working on a follow-up to their October 2020 report specifically into the bounce back loan scheme.

It is scheduled to be published in the winter of 2021 and will update their findings on the overall amount of bounce back loan arrears that have been repaid to date and how much remains outstanding. 

We’ve been reporting on bounce back loan arrears and repayment scenarios since April including regional and industry differences so know that whatever number they come up with, it’s going to be big and focus will then shift from data collation to debt recovery.

Businesses with bounce back loan arrears are being stopped from closing down

HMRC and the Insolvency Service are going to be very busy for the rest of 2021. 

They are already using their existing powers to close down businesses and sole traders who falsely obtained bounce back loans and are turning their attention to companies who took them out legitimately but have built up arrears. 

A recent FOI inquiry from revealed that they are being helped by the Department of Business, Energy and Industrial Strategy (BEIS) who are objecting to companies with bounce back loans from being struck off the Companies House register. 

And the final piece of the enforcement jigsaw is still to come with the introduction of The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill which is proceeding through parliament at the moment and expected to become law before the end of the year. 

Amongst the new powers it will grant The Insolvency Service retrospective powers to investigate the directors of companies that have been struck off to examine the circumstances of the dissolution.  

Because the powers are retrospective, they can go back two or three years after the fact and are not limited to bounce back loans but other debts too. 

Any director targeted under the new law could reasonably expect sanctions including fines, disqualification of up to 15 years and potentially being made personally liable for repaying any illegally obtained debts and costs incurred. 

With the remaining government support measures being withdrawn at the end of September and creditors actions such as statutory demands and winding up petitions being allowed to be issued once again, businesses with outstanding bounce back loans and other debts including VAT arrears or unpaid rent or business rates will be understandably worried. 

Instead of wondering when and where the first creditors’ blow will land, directors and business owners can use this time to draw up their own counter strategies starting with some professional insolvency advice

During a free initial consultation, we will better understand the situation facing a business and give our honest appraisal of the options available, depending on what they would like to do. 

Some businesses might want or be able to restructure their debts and eventually trade their way back to profitability with creditors help and forbearance through a company voluntary arrangement (CVA)

An alternative option might be a company voluntary liquidation (CVL)  if there is no realistic path to recovery.  

This will allow the orderly closure of a business even if it has bounce back loan debt and other outstanding arrears that it can’t reasonably clear. 

There are choices and chances that can be taken - but only if the directors or business owners act in time to access them and work with us to act on them. 


Stress might be one of the most misapplied words in common usage. 

Any good construction professional will be able to explain that stress is a temporary force acting on structure while strain is a permanent change - either in shape or size - directly resulting from the pressure of that stress. 

A little stress can be a good thing as it can prove that a design or structure is working as it’s meant to. It’s when it becomes a strain that more serious issues can occur. 

So has the previous 18 months caused the construction industry severe stress or has it turned into a permanent strain on the sector?

Year of Lockdowns

No UK industry was more badly affected by the pandemic than the construction industry. 

From March 2020 when the first lockdowns were instituted to the end of March 2021 more than 1,600 building firms closed down permanently. 

This is higher than both the hospitality and retail - two sectors previously thought to have fared the worst since the pandemic began. 

1,634 firms in construction went under during this period compared to 1,378 in hospitality and 1,355 in retail. 

In our Year of Lockdowns report, we broke down how the pandemic had affected every aspect of life across the country for businesses, their owners and staff. 

We found that the halting of various large and small scale building projects had badly damaged all elements of the construction industry. 

According to official Insolvency Service statistics, there have been an additional 596 construction insolvencies since March taking the total number since lockdown to 2,230 or 34 a week.

In this month alone, Darlington based Cleveland Bridge and All Foundations, one of the country’s top piling contractors, entered administration while Mansfield based Minister and AM Griffiths from Wolverhampton ceased trading altogether and went into liquidation. 

Sadly, they will be joined by other notable names this year.

Loans granted but will construction bounce back?

The various government support schemes greatly benefited construction during the past 18 months. 

The coronavirus jobs retention scheme, better known as furlough, allowed them to retain some of their most valuable staff while sites and projects shut down and borrowing such as CBILS and bounce back loans allowed them to quickly access funds to support themselves. 

Especially bounce back loans. 

The construction industry collectively accessed the most bounce back loans of any sector with nearly a quarter of a million bounce back loans granted - 238,825.

The total amount borrowed was £7 billion, second only to the retail industry, which is an average borrowing total of £29,310 per company.  

Under the most conservative official estimates, it’s expected that 15% of the total lent to the industry would remain uncollected which is a not inconsiderable £1.05 billion. 

This doesn’t just affect large contractors and builders but many sole traders and partnerships too, which make up a large proportion of the industry.

You can still close your company even if you have bounce back loan arrears - find out how

Next month sees a further bottleneck of trouble brewing for already struggling builders. 

The coronavirus job retention scheme better known as furlough is finally wound up meaning businesses will either have to decide to welcome workers back on full wages with no government support or consider redundancies. 

Bounce back loan and CBILS payment arrears will continue to be demanded along with any unpaid VAT arrears from 2020.  

Also certain creditors actions are set to resume on September 30th allowing creditors to seek statutory demands and winding up petitions for unpaid debts and a further small but critically important protection for constructors is also being removed. 

Termination clauses were suspended which stopped suppliers from ceasing their supply or asking for any additional payments or security from businesses that are undergoing a restructuring or administration process. 

From the end of next month they will be able to once again, which will place further strain on otherwise viable but struggling companies and potentially lead to more disorganised and chaotic collapses rather than professionally managed recovery strategies and business rescue plans. 

Chris Horner, Insolvency Director with spotted this specific danger last month when he said: “Construction companies that rely on the guaranteed availability of materials could quickly find themselves in difficulty if suppliers start to use these newly restored rights, right away.

“Due to the actions of a supplier, otherwise profitable businesses could find themselves trading while insolvent through no fault of their own. 

“If a builder, civil engineering practice or other vital part of the construction industry that underpins so much of the country’s infrastructure is now worried about what these changes will mean, we can help reassure them.

“There is a small window of opportunity for them to act - right now - before September 30th.

“We can help them formulate a recovery strategy for their business that will protect them into the Autumn months and beyond. 

“This includes if they have bounce back loan arrears, CBILS debt, VAT arrears or other unsustainable debts that have built up over the previous 18 months.” 

Construction businesses naturally have a genius for delegation. 

Not just using the right tool for the job but the right subcontractors, the right workers and the right people in the right places at the right time. 

We employ the same principle for businesses facing financial difficulties. 

Speak to an expert who can give you a quote and let you know exactly what they would do, when, how, why and then deliver on their promises.

The sooner a business owner or director gets in touch to arrange a free initial consultation, the earlier we can let them know what options they have and the quicker they can be implemented. 

Rules, regulations and trading conditions will change next month along with the seasons so act today so you won’t be caught out tomorrow. 

We’ve all seen multiple examples of it on social media especially, people will gleefully share false news and images that a simple check of the BBC or other reputable news site could tell them is not true. 

Received wisdom and advice can be harder to disprove than this so we find it annoying when we hear false and wrong advice passed off as something credible. 

One example we’re sadly hearing a lot about recently is the idea that companies with debts, including bounce back loans, business rates and VAT arrears, can simply dissolve themselves and these obligations away into thin air. 

Usually sensible people have been taken in by this one in particular - we even had a good client ask us “why should I pay for my company’s liquidation? Can’t I get it for free if it’s struck off?”

Why are businesses with outstanding bounce back loan borrowing being stopped from closing down?

The main reason why you should consider a voluntary liquidation rather than a strike off is because of the directors investigation aspect. 

The liquidator has to investigate the conduct of the directors in the lead up to the liquidation as a mandatory part of the process but if you have done everything in your power to keep the business running and have kept your records in good order then you’ll have nothing to worry about. 

Even if, in hindsight, you’re worried about how a couple of your decisions and actions might be viewed, you can explain the circumstances and rationale to the liquidator and if you can provide supporting evidence, they will be quite likely to accept your version of events and say so in their report to HMRC. 

The same doesn’t apply for directors who try to strike off or dissolve their company with outstanding debts - whether they be bounce back loans, CBILS, VAT arrears or other tax payments they owe. 

The rules about striking off are very strict and explicit - no company with debts can be struck off. 

But this doesn’t stop some unscrupulous business owners from trying to dissolve the firm to avoid their obligations - or honest directors that have received some bad advice and been told that this is possible.

There’s a new law making its way through parliament at the moment - the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill - that will give dishonest directors some pause for thought. 

Right now director disqualifications can be implemented for clear offences such as falsifying records and taking money out of an insolvency business. 

Any attempt to defraud HMRC by deliberately avoiding paying bounce back loan debts for example, would also very likely lead to disqualification.

The HMRC have held their fire considerably during the pandemic and subsequent lockdown periods because of the unique situation a lot of otherwise viable and profitable businesses found themselves in.

Things are changing as more industries begin to trade without restrictions, HMRC and The Insolvency Service will also be moving up the gears to begin recouping some of the historic levels of support paid out. 

One way they will do this is by using new powers given to them by the bill that allows retrospective investigations and actions to be taken against directors for the first time if they’re found to have dissolved their company with outstanding debts. 

Company strike offs and dissolutions will be examined to see if any were carried out with outstanding debts and if discovered could lead to punishments including fines, disqualifications of up to 15 years and personal financial liability to settle the debts placed on the directors. 

Business Secretary Kwasi Kwarteng said: “We need to restore business confidence and people’s confidence in business. 

“This is why we won’t hesitate to disqualify directors who deliberately leave employees and taxpayers out of pocket. Extending powers to investigate directors of dissolved companies means those who have previously been able to avoid their responsibilities will be held to account.” 

Chris Horner, Insolvency Director with, sets out the likely scenario.

“The new legislation is clearly aimed at those directors who thought they’d be clever and try to dissolve their companies to avoid paying their creditors - including HMRC.

“Directors who’ve done the right thing and liquidated their companies voluntarily through a creditors voluntary liquidation (CVL) or other process don’t have anything to worry about from the bill. 

“Dissolution or striking off a company is a cheap and efficient way of closing a dormant or debt free business and thousands of businesses do it every year. 

“It’s the small minority of directors who thought it was a great way to dodge their debts that should rightly be dreading a letter, email or increasingly possible from the end of September - a knock at the door. 

“An important point to make for businesses that legitimately took out bounce back loans or CBILS borrowing is that they aren’t HMRC’s primary target either.

“ As long as they have kept records and documentation or other evidence that supports their explanations on how the money was used, why they borrowed it, how their business functioned during the pandemic then they can be confident that they can answer any questions fully and convincingly. 

There are several other good reasons why you should be happy to liquidate your business voluntarily:

You can take advice and pick the insolvency practitioner choice of your choice to oversee the process and guide you through the issues and requirements. 

If a company goes into liquidation any personal guarantees directors have given on debt will crystallise - becoming payable immediately. A liquidator will help you create a plan to deal with this situation. Similarly, a liquidator has a duty to recover any funds owing from overdrawn directors loan accounts and can advise ahead of time the best course of action to deal with this eventuality.

A liquidator can advise on the redundancy procedure for existing staff and/or the transfer of existing staff to a new business (TUPE). 

One often overlooked but important detail is that directors who have been paid via PAYE are also eligible for redundancy payments. 

The liquidator can advise the best way forward to access what could be some vital income - especially as it may be possible to use it to finance the liquidation process with the proceeds.

There are a lot of things that have to be done correctly in a liquidation and it can be easy to lose track of them, especially if your attention is being pulled in several different directions. 

The liquidator will keep you on track of what needs to be done, how and when including the sale of assets, transfer of leases and several other requirements.

Topics such as liquidation and dissolution can be stressful at the best of times but even more so when sanctions such as disqualification and being made personally liable to repay any debts your company was closed down inappropriately or deceitfully. 

The vast majority of businesses that have closed down in the past two years have nothing to worry about. They did their duties to the best of their ability and made the difficult but ultimately correct decisions to close their companies down.

Several others might now be in a similar position and are nervous that although the correct decision is to liquidate the business, this wouldn’t be the end of matters for them or the company. 

We can reassure them in one conversation. 

After a free initial consultation with one of our expert advisors, directors will have a far clearer idea of what options they have to close or restructure their companies, the costs involved and what the likely timescales will be. 

Then, for the first time in a while for many, they will finally be able to see an end to their problems and be able to think of new beginnings instead. 

But since the credit crunch and great recession of the late 2000s, they have become commonplace for most forms of business borrowing, finance and loans. 

It’s not just banks that require them either. Many Landlords, trade suppliers and even consumer facing companies that provide products and services like smartphones now require a personal guarantee signed as part of any agreement to secure their repayments. 

When business is running smoothly and companies can keep up with debt repayments then this isn’t a problem but the past two years have been anything but smooth for reasons we’re all familiar with. 

Should you be worried if your CBILS loan has a personal guarantee attached?

A personal guarantee can sometimes be likened to a ticking time bomb at the heart of a company’s finances - especially if they hit a rough patch and have to choose which repayments they’re going to make each month. This is when it can go off.

It can be even more problematic for directors because the personal guarantee is attached to one of them and their finances directly. 

If the company becomes insolvent and is eventually liquidated, the personal guarantee would still be active and they would have to fund the repayment themselves. 

There are generally three options available to a director or business owner if a creditor activates or is about to call in their personal guarantee:

HMRC clarify approach on bounce back loan debt & CBILS including personal guarantees

An elegant one-two combination

One proven method to solve the problem of a personal guarantee hanging over a business is to use a combination of insolvency procedures. 

If a company has unsurmountable debt including an outstanding loan which has a personal guarantee attached to it given by one of the firm’s directors, the other directors might previously assume that this would prevent them from going into insolvency cleanly and efficiently.

A combination approach would solve this. 

In this example, the distressed business would propose a company voluntary arrangement (CVA) to its creditors which would see a proportion of debt (not including the personal guarantee) written off in return for the remaining debt to be paid in more manageable regular monthly installments.

The director in question would then enter an individual voluntary arrangement (IVA) themselves which would see a proportion of the personal guarantee written off, along with any other incurred debts including overdrawn directors personal loan accounts, in return for a regular repayment.  

This method protects the director from personal bankruptcy, CCJs and other negative outcomes and also allows the company to restructure its debt and remerge stronger when the CVA comes to an end. 

The creditors benefit from receiving two dividends - one from the CVA and another from the IVA - so will be more liable to accept a realistic proposal.

A final important point to reinforce is that if a business or individual is about to enter an insolvency procedure they should not make any payments to creditors they have a personal guarantee with before any other creditors. 

There is a formal legal order in which creditors must be paid and if some are paid out of order then this is known as a preferential payment. 

If this occurs then the director could become personally liable for repaying the amount back to the company in order to settle debts in the proper order. 

Five words can be used to separate any struggling business from a profitable one. 

They are “If it wasn’t for that…”. 

No matter what “that” is, whether it’s a small or large obstacle, in the best case it’s impeding a business from moving forward and fulfilling its potential. 

In the worst case it might be stopping a business from entering an insolvency procedure and restructuring itself to give it a decent chance at becoming viable once again. 

No matter what your company’s “that” is - we’re sure we can help

We offer a free, initial consultation for business owners and directors to discuss their situation and what immediate steps they can take to improve it. 

Even if a business has outstanding bounce back loan debt, CBILS or other problem debt it can’t get on top of - we’ll be able to work through a solution that could be acceptable to creditors. 

This lets directors get on with reestablishing the business once again. 

This includes some big names entering administration and the final liquidations of some famous brand names from the high street for good. 

Bounce back loan repayments affect sole traders and partnerships too 

Cleveland Bridge

Cleveland Bridge, builders of such iconic structures as the Sydney Harbour Bridge, the Tyne Bridge in Newcastle and the arch at the new Wembley Stadium, has gone into administration. 

The company is part of the Al Rushaid Group based in Saudi Arabia, and has been marketed for sale by administrators while staff continue to complete ongoing projects with others remaining on furlough as part of the Coronavirus Jobs Retention Scheme. 

The company employs 221 at its Darlington headquarters along with an engineering site in Newport, South Wales and a further 98 contractors. There are also many more companies in the supply chain that will be anxiously awaiting news

A spokesperson for the administrators said: “Cleveland Bridge UK has been a flagbearer for cutting edge British engineering for more than a century. 

“But no business is immune to the far reaching impact of the pandemic, which has delayed major infrastructure projects around the world and put significant financial pressure on the teams behind them. 

“CBUK is a business with a proud history and a formidable track record of engineering excellence. It also has great potential.”

Kapex Construction and Nobles

Previously profitable Newcastle contractor Kapex Construction Limited has also entered administration in July. 

According to their latest accounts filed at Companies House in March 2020, the business had assets of £4.1 million and liabilities of £3.6 million. 

There were £433,020 profits on a turnover of £11.6 million and was understood to have an order book of £40 million. This was an increase in profits from the previous year. 

Founded in 2016 as part of the Morton Group, Kapex was largely involved in residential construction contracts in the North East, working on projects including commercial building refurbishments and student accomodation. 

Work at the various sites the company was engaged with has stopped with staff being sent home while administrators look for a solution. 

Liverpool-based Nobles Construction has also gone into administration following tightening trading conditions. 

The business applied for but was turned down for a Coronavirus Business Interruption Loan (CBILS) last year which would have been used to resume trading and bring furloughed staff back into work. 

Their last project was a large housing development in Warrington with no work being completed from February 2021 as Nobles and the developer were in dispute. 

WRW Construction

WRW, one of the leading construction firms in Wales with three offices in Llanelli, Cardiff and Bristol, have entered administration after coming under “significant financial stress”. 

A statement issued by the business said: “Despite a significant order book of over £60m to be delivered within the upcoming 12 months, a supportive lender, fantastic staff and prospects, regrettably, owing to a series of events the last week, including an unfavourable adjudication outcome, the business was put under significant financial stress. 

“The directors have worked tirelessly with their advisors and funders to look for solutions for the business to remain viable. 

“Unfortunately, it has been regrettably determined that no viable options remain, and administration is the best course of action to preserve value for stakeholders and creditors. As a result of this, the directors are in the process of placing the company into administration.”

The business has financing secured against property and other assets and despite having several public and private sector clients and a strong supply chain, administrators hope to be able to secure returns for creditors.  

Titan Homes

Glasgow-based property developer Titan Homes has gone into administration after an extended period of financial difficulties. 

The flagship development they are working on is Meadow Road in Glasgow where 45 luxury apartments are being constructed which will now be taken over by a secured lender who will look for a new partner to complete the project either in partnership or as a solo project. 

Victoria’s Secret and Arcadia

The UK arm of lingerie store Victoria’s Secret has moved out of administration and gone into liquidation. 

The business entered administration in June 2020 after the Covid-19 lockdown became insurmountable. 

The administrators asked a judge at the Insolvency and Companies Court for permission as they would liquidate what assets remain and use them to pay dividends to remaining creditors. 

Another famous name in British retail - Arcadia - has also appointed liquidators to close the final remnants of the business that collapsed in November 2020. 

Their main task will be to repay creditors including HMRC which is owed a “substantial VAT liability” by several of the companies within the Arcadia group. 

A spokesperson said: “The liquidation of the Arcadia companies is a large and complex undertaking. Over the coming months the aim is to repay as much as possible of the group’s outstanding debts.”

Some of the names that will be disappearing for the final time include Burton, Dorothy Perkins and Evans. 

Gap and H&M 

American casual clothing powerhouse Gap announced it was closing all 81 of its physical stores in the UK and Ireland with 1,000 positions being lost as a result. 

The closure program is expected to be completed by the end of September 2021 but would continue as an online only business. 

H&M have also announced that while their profits have increased over a 12 month period and they would open 100 new stores, they would be closing 350 for a net loss of 250 locations. 

M&S Banks

Marks and Spencer announced that it was immediately closing all of its physical 29 bank branches with all current accounts being closed at the end of August 2021. 

The company said it hoped to redeploy workers wherever possible and confirmed that none of the travel money bureaux branches would be affected. 

A spokesperson confirmed that the closures were a result of the surge in online banking and would instead focus on credit cards, insurance, savings and loan products. 


Dutch retailer Hema announced it would close all six of its UK branches as it looks to focus more on its core markets in the Netherlands, Belgium and France. 

The company launched in the UK in 2014 planning to grow into an international brand but chief executive Saskia Egas Reparaz said that it was unfortunate that the company had to let staff go but it had never managed to build a solid position in the market.  

Liverpool School of English decimated by pandemic

The Liverpool School of English which prior to the pandemic taught 5,000 students a year from 80 countries has gone into voluntary liquidation. 

Founded in 1999, the school has provided tuition for over 50,000 students in its 20 year life. 

As international travel was brought to a halt in 2020 and remains extremely restricted in 2021, the immediate drop in applications and enrollments was catastrophic for the business. 
The school looked at offering online classes but interest was insufficient to maintain the school as a viable business. 34 positions will be lost with the closure. 

A spokesperson said: “Since March 2020, the company has been adversely affected as a result of the global response to the pandemic. These measures made the business unsustainable after so many years of success. 

“The directors have explored every single avenue to keep the business going since March 2020 but ultimately the challenges presented to them by lockdown restrictions and a decision by their insurance company not to pay out on business interruption and infectious disease claims were too great to overcome. 

“This is an example of a previously highly successful business being devastated by the global response to the pandemic and, regretfully, it certainly won’t be the last.”


JTF - a midlands based discount warehouse chain - has gone into administration with the closure of over 12 branches and warehouses and the probable loss of 500 positions. 

The 40-year-old company issued a statement expressing disappointment and stressing that the pandemic had played a significant role in the downturn with the forced closure of stores wiping out fireworks and Christmas sales which were “two of the largest seasonal items for JTF”. 

JTF Chairman Arthur Harris, who bought the chain in January 2020, said: “We believed we had secured a sale of the business but unfortunately the buyer pulled out at the last minute leaving nowhere to go.

“JTF had a fabulous team. I believed I had done everything possible to turn it around, taking the business back into profit within four months but just hadn’t factored Covid into the scenario.”

JTF continues to seek a buyer but in the meantime staff will be able to apply for redundancy.  

The majority of 2021 has passed and while it’s still the holiday season, many think things are also taking a rest but this isn’t true

As expenses continue to mount, the Coronavirus Job Retention Scheme furlough ends next month, CBILS and bounce back loan repayments continue to come due, defaults rise and the ban on creditor actions such as winding up petitions will be lifted.

The time to get advice and make decisions that could change the fortunes of your business is beginning to eke away. 

Get in touch with us today for a free initial consultation and we can help you put plans in place that will have an effect before the majority of businesses understand that time has begun to run out. 

The main finding is that the collective debt of independent retailers - hairdressers, nail bars and smaller shops - has jumped five times in just over a year from £500 million to £2.3 billion. 

Amongst the report’s recommendations is the suggestion that the government should write off a proportion of the debt as without any other help or assistance the report predicts there will be a UK-wide wave of store closures and job losses occurring in the Autumn. 

Bill Grimsey said: “Our high street independents have experienced a new-found appreciation during lockdown but they’ve also been forced to take on government backed loans, which they would not have normally been able to get because their balance sheets wouldn’t allow it. 

“Now they’re struggling to manage a mountain of debt and need help. 

“Many are teetering on the brink as a result and urgent support is required to stop a tsunami of closures coming.

“These businesses are the backbone of local communities who often put local people before making money - there is a really human side to this.

“People want their town centres and high streets to be places where they want to go for a reason that is unique and an element of that is independent businesses that provide that uniqueness. 

He added: “Britain is at a crossroads and the pandemic has brought about sweeping changes that will make a decisive break with a traditional high street model. 

“But we can’t build our way out of trouble. To unlock the potential of our high streets, we need to focus on people, partnerships and communities as well.

“That means protecting small businesses. It means supporting a new breed of digitally savvy entrepreneurs and making high streets a testbed for new thinking and it means promoting high standards and regulating key sectors such as hair and beauty.

“Britain needs a social recovery to lock in an economic one and our high streets should lead by example.”

Can you be pursued for bounce back loan debt - even if your business is closed down?

The report found that smaller independent hairdressers, barbers and beauty salons were among the hardest hit with collective debts equal to £300 million - approximately six times more than before the pandemic. 

The authors reviewed the published accounts of every UK independent business across the retail, services and hospitality sectors with total assets of £250,000 or less. 

They estimated that at least a third of the businesses that qualified as small independents were facing defaults.

They projected that 49,000 of the 145,941 independent businesses in the study were at risk of default from not being able to pay off their bounce back loan scheme borrowing. 

Bill Grimsey said: “The French government is already working on a debt write-off policy to save their small businesses from being crushed by debt and we need to do the same to save thousands.”

This proposed debt write-off solution would be funded by the £2 billion that large retailers such as Tesco, Sainsbury’s and B&M had returned to the government when they handed back their business rates relief. 

With the first repayments for bounce back loans and CBILS beginning last month and furlough payments also beginning to reduce, trading is also being hampered by increasing numbers of Covid-19 cases and self isolation for customers and staff alike. 

Other measures of support suggested by the report include giving small businesses classed as “non-essential” a business rates holiday until April 2022 and to allow them to further defer their VAT, PAYE and national insurance contributions in order to help their survival chances. 

Independent retailers, shops and hospitality businesses are indicative of the rest of the economy. 

Individually they might not generate as much turnover or income as bigger businesses but collectively they combine to form a major piece of the UK’s economic lifeblood as well as being anchors within their own community. 

If they’re in distress then the damage affects not only the business owners and directors but also their local area and their sector. 

The warnings from experts like Bill Grimsey not only match our own findings from earlier this year about the threat that bounce back loan debt defaults pose but also underline how important it is for businesses to act if they’re under pressure. 

There is a narrowing window of opportunity for companies to act before the end of September when various changes occur that will make the environment from October onwards far trickier to make the essential and necessary changes they need to give themselves the best chance of revival and renewal. 

Get in touch with us to arrange a free initial consultation with an expert advisor who will be able to let you know which options are available to you - right now. 

Business people

Not many would have assumed that over a year after taking them that a large minority, if not majority in some industries such as hospitality, bars or nightclubs, would not have been able to begin trading at all in some circumstances, let alone fully. 

We’ve covered the problems facing these businesses in earlier blogs as well as the small and closing window of opportunity for companies to implement rescue and restructuring plans ahead of creditor actions such as winding up petitions resuming and the CJRS furloughs ending at the end of September.    

Can I still be chased for bounce back loan repayment if my company is closed down?

But what about sole traders and partnerships facing the same issues?

Limited companies have established legal protections that stop creditors from pursuing individual directors and owners for debts - unless a personal guarantee was given - but sole traders and partnerships don’t have this shield. 

When applying for bounce back loans, the British Business Bank stated that sole traders and partnerships had to have been given sufficient information about the borrowing and incurred debts and repayments before any finance was given, under the provisions of the Consumer Credit Act. 

If this wasn’t adhered to by the lender underwriting the agreement and providing the funds then they would lose their ability to collect repayments on the loan - although they would be expected to challenge this.  The onus would be on the borrower to prove they hadn’t been adequately informed either at the time or during the course of the agreement. 

The Consumer Credit Act doesn’t apply to the bounce back loan scheme in its entirety although not all of its protections were removed, meaning the information requirement remained and that the collection of the loans were still regulated meaning that lenders would still have to comply with the relevant regulations should borrowers encounter financial difficulties. 

Additionally, lenders were not permitted to ask for or seek any personal guarantees for access to the bounce back loan scheme. 

Sole traders and members of a partnership are often used to risking their personal assets when borrowing so would be reassured that under the terms of the bounce back loan scheme, no recovery action can be taken by lenders over either a principal private residence or a primary personal vehicle - their home or car. 

This doesn’t mean that they cannot be pursued for outstanding bounce back loan debts or unpaid installments. Their other personal assets may still be at risk of recovery action from the end of September.

One other important caveat partnerships or sole traders who borrowed under the scheme should be aware of - they should not have been in financial trouble when they obtained the finance. 

From September 2020, an additional undertaking was inserted into the bounce back loan borrowing conditions making this requirement clear. 

The definition of a “business in difficulty” is that partnerships should not have accumulated losses greater than half of their capital in their most recent annual accounts - although this does not apply to firms three years old or less. 

For sole traders the requirement was that they should not have been in an active insolvency procedure while they sought the funding. 

The biggest problem for sole traders to overcome if they can’t repay their bounce back loans, is that legally, there’s no difference between personal and business assets.  This means that any business debt is personally owed and therefore recoverable from personal assets. 

Creditors can and will use high court enforcement officers or bailiffs to obtain whatever they can to sell and regain some of their funds. 

These too are currently limited (although not if the company was considered insolvent before the Coronavirus lockdowns started in March 2020) but are scheduled to return within ten weeks.

If a sole trader is in financial difficulty and can’t make bounce back loan repayments or other debts then they have insolvency options but not as many as a limited company or even a partnership so it’s even more important that they get professional advice at the earliest opportunity. 

Chris Horner, Insolvency director with said: “One of the main advantages of running a business as a sole trader or in a partnership is less administration and more agility than a limited company can supply.

“A drawback is that if they meet financial headwinds, then they don’t have the range of protection enjoyed by companies - they have more personal exposure. 

“But this doesn’t necessarily mean the worst. If they take action early enough to satisfy creditors including bounce back loan lenders then they can still continue to trade, if viable, and repay their debts while they do it.

“Alternatively, they can take advantage of specific insolvency protection for sole traders or individuals called an Individual Voluntary Arrangement (IVA)

“It operates in a similar way to how a CVA or company voluntary arrangement operates for a limited company allowing them to pay off debt in a series of manageable monthly payments while a proportion of the remaining debt is written off.

“No matter what issues partnerships or sole traders might be facing - if they get professional advice quickly enough, they will have options to change course.”

The bounce back loan scheme might have been a new initiative but the problems if a partnership or sole trader can’t repay it is not. 

Even though the scheme was government backed to encourage lenders to be more generous than they might otherwise have been to prospective borrowers, we’re seeing increasing evidence that recovery action is more aggressive and sustained than you may expect. 

This is because the government is increasingly demanding evidence from lenders that they have made genuine efforts to recover any debts before they can even begin to apply to have their funds reimbursed.  

Given this, if you think you might not be able to repay your bounce back loan or any other borrowing in full, or if you’ve missed payments already - you should get in touch with us as soon as you can

We offer a free consultation for sole traders or partners where they can outline what issues their business is facing and we can listen and let them know, often to their surprise, that they can take action to save it. 

The quicker they act, the more options they will have to choose from and more time to implement them effectively. 

The clock is ticking down for creditors actions to be allowed again so why waste any more time?

Collectively, the pubs, hotels, restaurants and nightclubs of the UK have endured possibly the hardest 18 months they will ever experience.  

Many haven’t opened their doors at all, have had to furlough staff and rely on other government backed support such as bounce back loans or CBILS borrowing and grants.

This has led to over £10 billion of collective pandemic debt being built up by these businesses. 

Now, as the government prepares to hand over responsibility on Covid protection measures to these individual businesses, representatives of the hospitality, retail and property sectors have asked MPs for further additional, targeted support measures based on their experiences. 

Are nightclubs facing a knife edge?

Their wish list includes:

Members of the Business Select Committee heard from representatives of the various sectors this week to gain a fuller picture of the reality facing reopening businesses.

The British Property Federation put forward evidence that 25% of commercial landlords and tenants had yet to reach an agreement on repaying an estimated £6.5 billion in unpaid rent.

They warned that if no solution is found by the end of March 2022, when the moratorium on evictions for commercial tenants ends, then there could be widespread legal action and subsequent consequences for businesses that are delinquent. 

The committee acknowledged that the government was planning on introducing some binding arbitration rules regarding outstanding rent soon but no further details have been announced. 

Kate Nicholls of UKHospitality urged parliament to take action before they break up for the summer next week. 

She said her members, made up of restaurants and hotels, were under increasing pressure as business rates relief and their contribution to staff furlough payments had begun to increase since the beginning of July. 

According to their figures, UK hospitality businesses took out a collective £6 billion in government backed loans including bounce back loans, had over £1.5 billion built up in tax arrears and other private debts and had incurred over £2 billion in rent arrears built up during the pandemic and subsequent lockdown. 

She said: “We’ve managed to keep bankruptcies and business failures to a relatively low level but I think we’ll see that picking up.”

Nightclubs in particular were keen to get clearer guidance on what their responsibilities will be for customer safety if they go ahead and reopen next week. 

Michael Kill of the Night Time Industries Association told the committee: “There is a lot of confusion. 

“The narrative seems to be that using the NHS Covid Pass will not be mandatory but if cases rise and the virus is not being controlled in certain spaces then they may well mandate it which could cause problems for our members.”

According to the latest guidance issued, “higher risk settings' ' such as nightclubs will be encouraged to use the pass as a condition of entry. 

While wearing face masks will no longer be mandatory the guidelines say they “expect and recommend that people wear face coverings in crowded areas such as public transport.”

They should also “meet outdoors where possible and let fresh air into homes and other enclosed spaces.” 

Businesses will be pressured to implement these measures by means of a legal duty on employers to manage risks for people affected by their business including the risk of Covid-19 infection. 

70% of nightclubs surveyed by NTIA said they didn’t plan to monitor customers’ vaccine status on entry although they would obviously consider doing more if the government mandated certification in certain venues. 

A Nightclub owner outlined the dilemma in testimony. He said: “We are looking at how to open as safely as possible. We could ask people to use the NHS app but our research shows that people don’t want to.

“If we do an event and 300 people then have to take 10 days out of their lives (isolating), having come into contact with someone with Covid and some then can’t work after that - are they going to come back?”

With the Covid-19 situation ongoing and rules being written then revised on a regular basis, businesses are desperate for some certainty and guidance. 

Sadly, the only certainty we can see at the moment is the closing window of opportunity for companies to take action to give themselves the best chance of surviving into the Autumn and beyond.  

The reintroduction of wrongful trading and winding up petitions at the end of September along with increasingly aggressive recovery action from lenders for outstanding bounce back loans means businesses only have ten weeks left to put their plans into action while the conditions are still relatively benign. 

As time ticks on, the rules and playing field are changing and soon it might be too late to act.

We offer a free, initial consultation for any business owner or director who wants to put their survival strategy to the test. 

Once we get a fuller picture of your individual situation, we’ll be able to advise on the best course of action you can take to restructure and rescue your business or explore alternative options that might be more beneficial in the long run. 

Business Rescue Expert is part of Robson Scott Associates Limited, a limited company registered in England and Wales No. 05331812, a leading independent insolvency practice, specialising in business rescue advice. The company holds professional indemnity insurance and complies with the EU Services Directive. Christopher Horner (IP no 16150) is licenced by the Insolvency Practitioners Association


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