Small Business Insolvency: What Are Your Options?

Running a small business comes with its fair share of challenges but when cash flow issues or mounting debts start to feel unmanageable, it’s time to take action. If your business is struggling, understanding your options around insolvency can help you take back control and find the best way forward.

What is Small Business Insolvency?

Insolvency occurs when a business is unable to pay its debts as they fall due, or its liabilities exceed its assets. For small businesses, this can happen quickly especially in unpredictable trading conditions. But insolvency doesn’t mean the end. In fact, for many directors, it’s the beginning of a new, more sustainable chapter.

Your Insolvency Options

If your small business is insolvent or facing severe financial pressure, there are several structured solutions available:

1. Creditors’ Voluntary Liquidation (CVL)

This is the most common route for insolvent small businesses. It allows directors to close the company in a controlled and legally compliant way, writing off unsecured debts and avoiding court action. It can also relieve the stress of creditor pressure.

Typical cost: Our liquidation service starts at £4,000 + VAT, but for smaller companies with minimal liabilities or assets, this may be lower. We’ll always provide a clear and tailored quote based on your business’s unique situation.

2. Company Voluntary Arrangement (CVA)

A CVA is a formal agreement with creditors to repay debts over time, often at a reduced rate. It allows the company to continue trading and can be a great tool for recovery—provided the business is fundamentally viable.

3. Administration

This process protects the company from legal action while a licensed Insolvency Practitioner works to restructure or sell the business. For some, it offers a path to preserve jobs and key business operations.

4. Business Restructuring

Sometimes, a business can avoid formal insolvency altogether through restructuring. This might include refinancing, reducing overheads, negotiating payment terms, or spinning off non-performing parts of the business. At Parker Walsh, we specialise in helping directors assess their options and put a recovery plan in place.

It’s Not Always the End

At Parker Walsh, we believe insolvency is not about failure - it’s about finding the right way forward. Whether that means an orderly closure or a turnaround strategy, we’re here to help you understand your options and act in your best interests.

We also offer business recovery services that focus on saving what can be saved and creating a more stable foundation for the future. Many businesses emerge from insolvency stronger, leaner, and more focused.

Why It Pays to Act Early

The sooner you get advice, the more options you’ll have. Waiting too long can limit your choices and increase personal risk as a director. By speaking to an experienced Insolvency Practitioner early on, you can ensure your actions are lawful and protect both yourself and your business.

Let’s Talk

Every business is different. That’s why we offer bespoke support tailored to your circumstances. Our fees are transparent, and for small businesses, our insolvency services can often be completed for less than the standard £4,000 plus VAT starting point.

If you think your business might be insolvent, or you simply want to explore your options, get in touch with us today. There’s no pressure, just honest advice and a clear path forward.