Cash flow is tight. Suppliers are chasing payment. HMRC deadlines keep slipping. The figures do not quite add up, even though you are working harder than ever. It is natural to feel anxious, defensive or even ashamed when this happens. It is also more common than you might think.
Restructuring is about taking control again. It means stepping back, getting a clear picture of where the business really stands, and then making practical changes to give it the best chance of survival. Sometimes that is done through internal fixes. Sometimes it involves more formal insolvency procedures. This guide walks through the main business restructuring options, shows how to tell when informal steps are not enough, and explains how we can help you choose the right path for your company.
What Does Business Restructuring Mean in Practice?
In simple terms, restructuring means changing how your business is organised so it can cope with financial pressure and, ideally, return to stability. It usually involves revisiting how you manage cash, debt, costs and sometimes the way the business itself is set up.
Restructuring is not automatically the same as insolvency. It sits on a sliding scale of options. At one end you have internal fixes that you can start right away. At the other you have formal insolvency procedures that give legal protection and a clear framework when things have gone further.
You can think of business restructuring in three broad layers:
- Operational restructuring
This is about how the business runs day to day. It can involve cutting or reshaping costs, changing your product or service mix, renegotiating key contracts, or adjusting staffing levels in a fair and lawful way. - Financial restructuring
Here the focus is on your balance sheet and cash flow. You might look at refinancing existing borrowing, consolidating debts, agreeing new payment terms with lenders, or using an HMRC Time to Pay arrangement as part of wider business debt restructuring. - Legal and structural restructuring
In some cases, you may need to change the legal structure of the business or use more formal tools such as a Company Voluntary Arrangement (CVA), administration or, where rescue is not possible, liquidation. These are forms of UK insolvency that bring in a regulated framework and the support of a licensed insolvency practitioner.
Early restructuring is about creating space and time. The aim is to protect value, preserve as many jobs as possible and reduce the risk to you as a director. The earlier you act, the more likely it is that informal steps will be enough, without needing to move into formal insolvency procedures.
Sectors We Support
We support company directors in every sector, from construction firms and logistics companies to pubs, cafés, restaurants, hotels, retailers and manufacturers. Our advice is always clear, confidential and shaped by real experience in your industry. Whether you’re dealing with unpaid tax, supplier pressure or falling income, our team understands the challenges and will guide you through the best next steps.
Early Warning Signs That Your Business May Need Restructuring
Financial pressure rarely appears overnight. It builds up over months. Spotting the pattern early is one of the most powerful tools you have. Some simple signs suggest that restructuring should move higher up your agenda.
- You are always juggling who gets paid next
Each week turns into a choice between paying wages, rent, key suppliers or HMRC. You rely on favours, payment holidays or part payments just to get through the month. - Tax payments are slipping
VAT, PAYE or Corporation Tax is paid late or not at all. You start to think about using one tax bill to fund another. You may be considering a Time to Pay request just to create breathing space. - Overdrafts and credit cards are always at their limit
The overdraft never clears. Business or personal credit cards are used to pay day to day expenses rather than one off items or growth. You might even be using personal borrowing to support the company. - Pressure from creditors is increasing
Suppliers shorten terms, put accounts on stop or start talking about formal collection. Landlords chase more actively. You may have received default notices, statutory demands or County Court claims. - Cash flow forecasts are based on hope, not facts
You are relying on one big sale, a lump sum from a customer or a new investment to make the figures work. There is no realistic back up plan if that money does not arrive. - You are constantly firefighting
Most of your time is spent dealing with payment problems, creditor calls and short term fixes. There is little space to focus on sales, service or strategy. - Stress and worry are affecting your life outside work
Sleep, health and family time are taking the strain. You find it hard to switch off, which makes it harder to think clearly about the business.
If several of these points ring true, it is a strong sign that your company may need a more structured approach to business restructuring. It does not automatically mean the business has to close. It does mean you should take advice early, so that a licensed insolvency practitioner can help you understand your options before creditor pressure or legal action reduces the room for manoeuvre.
If you’re worried about your business, Anderson Brookes can support you. Give us a call today on 0800 1804 935 or email us at advice@andersonbrookes.co.uk. We can talk you through your options and help you to right the ship.
Internal Fixes and Practical Restructuring Steps You Can Take Now
Once you have spotted the warning signs, the next step is to move from firefighting to a more structured approach. Internal fixes are often the starting point for business restructuring. They can buy time, improve cash flow and show creditors that you are taking responsible action.
You do not have to do everything at once. The aim is steady, practical progress.
Get a Clear Financial Picture
Restructuring starts with the numbers. Guesswork makes decisions harder and more stressful.
It helps to pull together a simple pack of information:
- Recent management accounts
- An aged debtor report
- An aged creditor report
- A 13-week cash flow forecast
- Details of all loans, finance agreements and security
This may feel daunting if records are behind. Even a basic summary is better than none. Once you can see who is owed what, and when payments fall due, it becomes easier to decide whether informal restructuring is realistic or whether you need more formal business debt solutions with professional support.
Cost Reduction and Operational Changes
The next step is to look at how the business operates. Trimming costs is not just about cutting everything. It is about reshaping the business so that it has a chance to be profitable again.
You might:
- Pause or cancel non-essential subscriptions and projects
- Reduce or renegotiate premises costs where possible
- Focus on higher-margin products or services and phase out loss-making lines
- Tighten stock control to avoid tying up cash unnecessarily
Staffing is often one of the largest costs. Any changes here must follow employment law and good HR practice. That may mean using short-time working, voluntary measures or restructuring roles rather than rushing straight to redundancies. If you are unsure, it is sensible to take HR or legal advice before making decisions that affect people’s jobs.
Operational restructuring will not fix every problem. It can, however, reduce the monthly pressure and make other restructuring options more likely to succeed.
Improving Cash Flow and Refinancing
Cash flow keeps the business alive while you work on longer-term restructuring. Small, consistent changes can make a big difference.
You could:
- Invoice promptly and follow up late-payers in a structured way
- Ask reliable customers for deposits or stage payments
- Offer small discounts for early payment where that makes sense
- Shorten your own credit terms where the market allows
On the outgoings side, talk to lenders and finance providers early. In some cases, refinancing or rescheduling borrowing can smooth out payments or reduce short-term pressure.
Any refinancing should be considered carefully if the company may already be insolvent, particularly if personal guarantees are involved. Independent advice can help you weigh up whether financial restructuring will genuinely support a turnaround or only delay more difficult decisions.
Time to Pay and Informal Creditor Negotiations
Tax arrears are a common trigger for restructuring. If the business is viable but behind on tax, a realistic plan to clear arrears over time can be part of your overall strategy.
An HMRC Time to Pay arrangement is one example. This is an agreement to pay tax debts in instalments over an agreed period. HMRC will usually expect you to be open about your situation, provide evidence and offer a schedule that is achievable. This might sit alongside other steps, such as tightening cash flow and reducing costs, rather than replacing them.
For other creditors, informal negotiations can be effective, particularly if you act before legal action starts. You might:
- Propose temporary reduced payments
- Ask to capitalise arrears and spread them over a longer term
- Request a short moratorium on payments while you implement changes
Creditors are more likely to engage if proposals are honest, supported by figures and applied consistently. Government guidance on using debt management schemes to restructure a company’s finances can help you understand how more formal arrangements may work in the background.
If discussions become complex, or if several creditors are involved, speaking to a licensed insolvency practitioner at an early stage can bring structure and credibility to the process. We can review your position, help you plan a realistic restructuring route and, where appropriate, move from informal deals to more formal solutions that give you legal protection.
When Informal Restructuring Is Not Enough
Internal fixes can do a lot, but they cannot solve every situation. If the company is already insolvent, or likely to become insolvent soon, directors have to think more carefully about their legal duties and the impact on creditors. At this point, more formal measures may be needed as part of a wider restructuring plan.
Understanding Insolvency Tests and Director Duties
Insolvency is not just a feeling that things are tough. There are simple tests:
- Cash flow test: You cannot pay debts as they fall due.
- Balance sheet test: The total of your liabilities is greater than the value of your assets.
- Legal action test: You are facing serious enforcement, such as statutory demands or winding up petitions.
If any of these apply, you may already be trading while insolvent. At that point, your duty shifts. You must put creditors’ interests ahead of shareholders and your own. Continuing to trade without a plan can increase the risk of wrongful trading or personal claims later.
This is where early advice from a licensed insolvency practitioner becomes critical. They can review your position, explain how insolvency law applies in your situation, and help you consider the formal options, including administration, CVAs and liquidation. For directors who are particularly worried about administration, the government’s director information hub on administration provides clear background alongside tailored professional advice.
Company Voluntary Arrangements (CVA)
A Company Voluntary Arrangement is a formal deal with your unsecured creditors. In a CVA, you agree to pay part or all of your debts over an agreed period, usually from future profits or asset realisations. Interest and charges may stop, and once creditors approve the proposal, they are bound by it.
A CVA can be helpful where:
- The underlying business is viable, but past debt is too heavy
- You need protection from creditor pressure while you restructure
- Creditors are likely to receive more than they would in liquidation
A CVA is designed and overseen by a licensed insolvency practitioner. They work with you to create realistic forecasts, draft the proposal and negotiate with creditors. Used properly, a CVA can be a powerful form of business restructuring that allows trading to continue while debts are brought back under control.
Company Administration and Business Rescue
Administration is a formal insolvency process that gives a company legal protection from most creditor action while a plan is put in place. An administrator is appointed to take control of the company, protect assets and decide the best outcome for creditors.
For some businesses, administration is the right way to create space to restructure, refinance or sell the business as a going concern. It can protect jobs and value that would otherwise be lost in a break-up. In many cases, administration can be a second chance for a fundamentally sound business that has been overwhelmed by debt or a short-term shock.
There is a clear legal framework for putting a company into administration, alongside official government guidance on how to put your company into administration. Used at the right time, it can be a central part of a wider rescue and restructuring strategy, rather than an admission of defeat.
Restructuring Plans, Schemes and Other Court-Based Tools
Larger or more complex companies sometimes use court-approved restructuring plans or schemes of arrangement. These tools can bind different groups of creditors, including secured lenders, into a single restructuring plan, even if some creditors vote against it.
Most small and medium-sized companies will not need these more technical procedures. They are more likely to use CVAs, administration or liquidation, often alongside informal negotiations. However, it can still help to understand that these tools exist, especially where banks or institutional lenders are involved. Your insolvency practitioner can explain whether they are relevant to your situation or whether more straightforward options are better.
When Liquidation Is the Right Option
Sometimes, the most responsible decision is to close the company in an orderly way. If there is no realistic prospect of rescue, continuing to trade can increase losses for creditors and risk for directors. In those cases, a creditors’ voluntary liquidation can be part of a broader restructuring of your life and finances, allowing you to draw a line and start again.
We provide comprehensive liquidation advice that explains what liquidation means in practice, how director conduct is reviewed and what happens to employees and creditors. For smaller companies, tailored guidance on liquidation for small businesses can help you understand the specific steps involved and how to close the company properly.
Liquidation is not the only way to close a company. In some situations an alternative to striking your company-off is more appropriate, especially where there are outstanding debts or disputes. Choosing the right route is important. The best option will depend on your company’s balance sheet, creditor position and future plans.
If you feel that rescue is no longer realistic, or you simply want to understand your options, we can combine advice on liquidation with wider help on dealing with business debt, personal guarantees and next steps. Contact us now for support.
How We Work With You on Restructuring and Rescue
Reaching out for help can feel like the hardest step. Our role is to make the next steps simpler, calmer and clearer. You stay in control. We give you regulated advice, practical options and a clear plan.
We look at the whole picture, not just one problem. That means reviewing trading prospects, debt, creditor pressure and your own goals, then using the right mix of restructuring tools to match your situation. Sometimes that is informal support. Sometimes it is a formal insolvency process that gives you and your creditors more certainty.
Although every case is different, the way we support you tends to follow a simple pattern.
First Conversation
You tell us what is happening. We listen. You do not need perfect figures or paperwork to start. We ask some focused questions about debts, assets, creditor pressure and your personal position, including any guarantees.
Initial Assessment
Once we have the basics, we look at whether your company is likely to be viable with restructuring or whether closure is more realistic. At this point we will talk you through informal options, such as cost cutting, cash flow support and business debt solutions, alongside more formal routes like CVAs, administration or liquidation.
Clear Explanation of Your Options
We explain each option in plain English. You will understand:
- What it means in practice
- How creditors are likely to react
- What happens to staff and assets
- How your own position as a director may be affected
There is space to ask questions and to go over anything that worries you. Our job is to turn complex rules into straightforward choices.
Designing and Implementing a Plan
If you choose to move forward with us, we then help you put the agreed plan into action. That might involve informal creditor talks, a CVA proposal, putting your company into administration, or helping you through a creditors’ voluntary liquidation where that is the most responsible route. Throughout, you have a single point of contact who knows your case and keeps you informed.
Balancing Rescue, Closure and a Fresh Start
Not every business can be saved. Sometimes the right outcome is to close the company in a controlled way while protecting you as far as possible. In those cases, Anderson Brookes can help you to understand how closure fits into a wider restructuring of your life and future plans.
Where there is a real chance of recovery, we focus on stabilising the business and protecting value. That may include using administration as part of a wider strategy, or agreeing a CVA that lets you trade out of difficulty over time. In every scenario, the advice comes from a licensed insolvency practitioner, so you can be confident it is regulated, independent and in line with your duties as a director.
If your company is under financial pressure, you do not have to navigate restructuring alone. A short, confidential conversation can be enough to see the situation more clearly and to decide whether rescue, controlled closure or a mix of both is right for you.
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When to Call an Expert: Checklist
It is not always easy to judge when normal pressure has turned into a real risk. This checklist can help. If several points apply, it is time to speak to a licensed insolvency practitioner and look at formal restructuring options.
Ask yourself:
- Are you missing payments to HMRC, landlords or key suppliers on a regular basis?
- Are you using personal savings, credit cards or new loans simply to cover old debts?
- Is your overdraft always at its limit, with no realistic plan to reduce it?
- Have you received statutory demands, County Court Judgments or threats of a winding-up petition?
- Are major creditors refusing further credit or placing your account on stop?
- Do you suspect the company might already be insolvent but feel unsure what to do next?
- Are you worried about wrongful trading or personal liability if you carry on?
- Is the stress of the business affecting your health, sleep or family life?
If you recognise your situation in these questions, it does not mean everything is lost. It does mean that patching the problem is no longer enough. Independent, regulated advice can help you understand whether rescue, administration or a CVA is the safest route for you and your creditors.
A short, confidential conversation at this stage often opens up more restructuring choices than waiting until legal action or enforcement has already begun.
Business Restructuring FAQs
Is restructuring the same as insolvency or liquidation?
No. Restructuring is a broad term. It covers everything from internal cost cutting and cash flow improvements through to formal insolvency procedures. Insolvency and liquidation are specific legal processes within that wider picture.
A company can go through a period of business restructuring without entering formal insolvency. Equally, when informal steps are no longer enough, a formal process such as a CVA, administration or liquidation can form part of a structured restructuring plan. The key is to match the tool to your situation, rather than forcing the business into a single route.
Can I keep trading while we restructure our debts?
Often, yes. Many restructuring options are designed to allow trading to continue, provided it is in creditors’ interests. Internal steps such as cost reduction, cash flow improvements and informal creditor agreements are all compatible with ongoing trade.
Even in formal procedures, trading is sometimes possible. A CVA usually allows the company to keep operating under an agreed payment plan. In administration, the administrator might continue trading while seeking a buyer or restructuring the business. What matters is that trading is responsible, properly monitored and in line with your duties as a director.
What happens to staff during a business restructuring?
Staff are often central to whether a restructuring succeeds. In many cases, roles remain in place and restructuring focuses on non-staff costs first. Where changes to roles or headcount are needed, they must follow employment law and fair process.
In a CVA or informal restructuring, you usually retain control of staffing decisions, although you should take HR or legal advice before making changes. In administration, the administrator will review staffing as part of their plan for the business. Even where redundancies are unavoidable, a structured process can help you manage the impact more fairly and transparently.
Can I restructure if most of the debt is tax or HMRC arrears?
Yes. Tax arrears are a common feature in business restructuring. HMRC will often consider a Time to Pay arrangement if the business is viable and proposals are realistic. This can sit alongside other steps, such as cutting costs, improving cash flow and using formal business debt solutions where needed.
If tax debts are large, or if HMRC has already started legal action, a more formal process may be required. That might include a CVA or administration to protect the position while a longer term solution is agreed. Early engagement usually leads to better outcomes than waiting for enforcement to escalate.
What paperwork do I need before I speed to an insolvency practitioner?
Perfect paperwork is not required. It is helpful, not essential. To start a meaningful conversation, try to gather:
- Recent management accounts, even if they are rough
- A list of creditors and approximate balances
- Details of tax arrears and filing deadlines
- Loan and finance agreements, including any personal guarantees
- Basic cash flow figures for the next few weeks
If some of this information is missing, do not let that delay you. A licensed insolvency practitioner can help you work out what is most urgent and how to fill in the gaps. The most important step is reaching out and explaining what is happening. The detail can follow.
Restructure with Confidence
If your company is under financial pressure, you do not have to work it out on your own. The most important step is to talk things through with someone who understands restructuring and insolvency, in a calm, confidential setting.
We can review your situation, explain your options in plain English and help you decide whether to focus on rescue, controlled closure or a fresh start. There is no judgment, only practical guidance on what to do next.
If you recognise your business in this guide, take the pressure off your shoulders and get in touch today. You can call us on 0800 1804 935 or contact us online for a free, confidential discussion about your next steps.
