What to Do When Your Business Runs Out of Options: A Survival Guide
Tenable Support Team
Business Crisis Specialists
When your business faces a financial crisis and traditional solutions seem exhausted, it's natural to feel overwhelmed and uncertain. This comprehensive guide explores practical steps you can take when you feel you're running out of options, helping you understand your choices and find a path forward.
Understanding the Crisis: You're Not Alone
Finding yourself in a position where your bank won't help, creditors are pressing for payment, and your trade is suffering can feel isolating and frightening. The truth is, thousands of UK business directors face similar situations every year. Economic pressures, unexpected market changes, and circumstances beyond your control can push even the most diligent directors to breaking point.
The key difference between businesses that survive these crises and those that don't often comes down to one critical factor: seeking expert help early enough.
Common Scenarios That Lead to Crisis
Bank Won't Help
Your bank has rejected your loan application or recalled facilities, leaving you without the working capital you desperately need to continue trading.
Creditor Pressure
Suppliers are threatening legal action, HMRC is pursuing tax arrears, and you're juggling who to pay first just to keep the lights on.
Trade Suffering
Sales have declined, major contracts have been lost, or market conditions have changed dramatically, leaving your business model unsustainable.
Lost Direction
You've tried multiple solutions, nothing seems to work, and you genuinely don't know which way to turn or who to trust for advice.
Immediate Steps You Should Take
When you're in crisis mode, taking the right immediate actions can make the difference between rescue and closure. Here's what you need to do right now:
Your Emergency Action Plan
Stop Trading Immediately If Insolvent
If your company cannot pay its debts as they fall due, continuing to trade could expose you to wrongful trading charges. This is the most important legal protection you have as a director.
Seek Independent Expert Advice
Contact a business rescue specialist or licensed insolvency practitioner immediately. Don't rely on your accountant alone - you need someone who specializes in crisis situations.
Protect Yourself from Personal Liability
Document all decisions, communications, and actions. Review any personal guarantees you've given. Ensure you're acting in creditors' best interests, not just your own.
Communicate Honestly with Key Stakeholders
While you shouldn't panic creditors, being transparent with key suppliers, major creditors, and HMRC can sometimes buy you valuable time and goodwill.
Your Options When Nothing Else Works
Even when it feels like there are no options left, there are always pathways forward. Understanding these options is crucial to making the best decision for your situation:
Company Voluntary Arrangement (CVA)
A formal agreement with creditors to pay back debts over time while continuing to trade. This can freeze interest and legal action, giving your business breathing space to recover.
Best for: Viable businesses with temporary cash flow problems
Administration
Provides legal protection from creditors while an administrator works to rescue the business, achieve a better result for creditors than immediate liquidation, or sell the business as a going concern.
Best for: Businesses facing aggressive creditor action but with salvageable value
Pre-Pack Administration
The business is sold to a new company (often owned by you or your management team) before entering administration, allowing the viable parts to continue while leaving debts behind.
Best for: Businesses with valuable assets or customer relationships but unsustainable debt
Time to Pay Arrangement with HMRC
HMRC may agree to let you pay tax arrears over time if you can demonstrate ability to pay and maintain current obligations. This requires careful negotiation.
Best for: Businesses where HMRC debt is the primary issue
Creditors' Voluntary Liquidation (CVL)
If rescue isn't possible, a CVL provides an orderly wind-down that protects directors from wrongful trading claims and ensures fair treatment of all creditors.
Best for: When rescue is not viable and closure is inevitable
Common Mistakes to Avoid
Ignoring the Problem
Hoping things will improve without taking action almost always makes the situation worse and reduces your options.
Continuing to Trade While Insolvent
This exposes you to personal liability for wrongful trading and can result in director disqualification.
Preferring Certain Creditors
Paying some creditors in full while ignoring others can be challenged as a preference and create personal liability.
Taking Out Additional Credit
Borrowing more money when you know the company is insolvent can expose you to fraud charges.
Waiting Too Long to Get Help
The earlier you seek professional advice, the more options you'll have available. Delay costs you choices.
The Path Forward: Taking Action Today
Facing a business crisis is one of the most stressful experiences a director can endure. But it's important to remember that seeking help is not a sign of failure - it's a sign of responsibility. The directors who protect themselves best and achieve the best outcomes are those who act quickly, transparently, and with expert guidance.
Whether your business can be rescued or needs to close, there is a right way to handle the situation that protects your interests, minimizes personal liability, and preserves your ability to move forward.
Don't Face This Alone
If you're in a crisis situation or running out of options, contact our business rescue specialists for a free, confidential consultation. We'll assess your situation honestly and help you understand the best path forward.