Bars and restaurants were among the first businesses to be affected by the coronavirus pandemic in 2020, and the subsequent lockdowns/restrictions. As a result, and due to the ongoing uncertainties surrounding coronavirus, many bar and restaurant businesses continue to experience serious financial distress.
In order to deal with the situation, and to stand a chance of surviving these unprecedented circumstances, it’s vital to obtain professional liquidation advice if you run a bar or restaurant business.
Not only will you ensure your own compliance with strict insolvency laws and protect your creditors, you’ll also gain peace of mind that whatever you do next is appropriate for your circumstances.
Every business is unique, and there may be elements that could carry on despite the financial troubles you’re experiencing. Streamlining and simplifying have enabled businesses to adapt to new trading patterns with more ease, and gain the agility to pivot their business model where necessary.
Navigating a course through this devastating pandemic requires professional insolvency input, as it’s so important for company directors to take the correct steps. If you don’t, you may worsen the financial losses that creditors suffer, and could face allegations of misconduct or wrongful trading as a result.
This is why voluntarily liquidating your business is the best move when there are no appropriate rescue measures. Creditors’ Voluntary Liquidation (CVL) minimises creditor losses and allows you to fulfil your legal obligations as a director.
Directors are able to decide when their company is placed into liquidation, and also appoint their own choice of liquidator when using the CVL process. A further benefit is that you may be eligible to claim director redundancy pay.
Creditors’ Voluntary Liquidation is an official process that attracts professional fees, and you may be wondering how the company could afford to pay them. If you’re able to claim redundancy pay, however, you could use this money to pay for the CVL, or even to repay some of the company’s debts.
Redundancy pay can be particularly beneficial if you’ve provided a personal guarantee for business borrowing, and can’t afford to repay the lender. The average claim for director redundancy is £9,000, so this is a course of action that’s well worth finding out more about.
UK Liquidators can provide more information on director redundancy, alongside liquidation advice for your bar or restaurant business. But what if liquidation isn’t your only option - what other processes might be available to keep the business going?
Licensed insolvency practitioners with specific sector experience can provide the business liquidation advice you need, but you can also find out if there are any alternative measures that could help you save the business.
With vaccinations making it safer to open up the economy, the long-term outlook is becoming brighter for bars and restaurants. So what procedures might be available to rescue your business if it’s deemed viable?
Restructuring your debts
Restructuring debts means that you pay creditors over a longer period of time than contractually agreed. This reduces your financial load, and releases vital working capital for the longer-term.
Debt restructuring can also be carried out on a formal basis within an official agreement called a Company Voluntary Arrangement (CVA). This is a legally binding agreement negotiated and put in place by a licensed insolvency practitioner (IP), and typically lasts between two and five years.
It may be that further finance is all you need to get your bar or restaurant business back on track. With many alternatives to bank funding now available, it can be an extremely flexible way to fund your business. UK Liquidators have contacts with alternative financiers around the country, and can put you in touch with the most suitable providers.
Other measures, such as company administration and HMRC’s Time to Pay scheme, could also be appropriate for your business. You may even find that selling your business is possible.
If liquidation is the only option, however, our highly experienced team can provide the advice you need. UK Liquidators operates an extensive network of offices around the UK – please contact one of the team to arrange a free, same-day consultation.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
Take our 60 second test and find out
If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
Complete the below to get in touch