Electrical contractors closure and rescue options
Electrical contractors, especially those working in the construction sector can encounter a range of financial challenges. These include: volatile project workloads, escalating material and labour costs, and the need to adhere to rigorous safety and regulatory standards. For many contractors, these pressures can lead to significant financial strain, so it’s vital you understand the insolvency options available.
In this guide, we will offer clear, professional advice tailored for electrical contractors. By understanding the available options, you can make informed decisions to address potential financial difficulties—whether through business restructuring, securing additional funding, or pursuing an orderly closure to protect your business and its assets.
Common financial challenges for electrical contractors
We can help advise on specific financial issues your electrical contractor business may be facing, including but not limited to:
- Rising material and supply costs
Electrical contractors rely on materials and supplies that can be subject to volatile price changes. Increases in the cost of key materials—such as copper, cables, and other electrical components, can significantly impact profit margins, especially with fixed-price contracts. If this has left your company with overwhelming debts, we can help you on if a payment plan would suit your business. - Cash flow delays
Contractors can face delays in receiving payment for completed work, particularly on large projects where payment is tied to work completed. These delays can lead to cash flow problems, making it challenging to pay suppliers and staff on time, which may affect day-to-day operations. If you’re concerned about your company’s solvent position, we can assess its circumstances and look at feasible insolvency solutions - Increased insurance and compliance costs
Electrical contractors are subject to a range of regulatory and safety requirements. Compliance with these industry standards and regulations can incur substantial costs for licensing, safety checks, and insurance premiums, which can be difficult for businesses to manage. We can advise on potential restructuring options and look at best insolvency procedures for the financial issues your company faces. - Bounce Back Loans (BBL)
The government-backed Bounce Back Loan Scheme provided a lifeline for many businesses during the COVID-19 pandemic. However, companies are now struggling with BBL repayment terms. We can help guide you through the available repayment options and explain how a BBL will be treated in different insolvency scenarios.
How we can help rescue your electrical contractors
Below are two formal insolvency procedures, which would allow your company to continue trading whilst protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a payment plan between a company and its creditors that allows you to restructure your company’s unsecured debts, while continuing to trade, by making affordable monthly payments over a fixed period. Once you reach an agreement with your company’s creditors, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The process lasts for up to 5 years, and upon successful completion, any remaining unsecured debt remaining in your arrangement is written off.
More on Company Voluntary Arrangements - Restructure your company through administration
Administration is an insolvency procedure for insolvent companies. Entering the procedure, your electrical contractor company will initiate a temporary state of protection given by a moratorium that halts creditor action including legal proceedings. This gives your company breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner, more profitable organisation. If rescuing the company isn’t a viable option, we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, or the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your electrical contractors
If your electrical contractor company is insolvent and creditor pressure has reached a level where the business cannot continue trading, formal liquidation would draw a line under its operations and write off its unsecured debts.
- Close your electrical contractors down via a Creditors Voluntary Liquidation (CVL)
A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your electrical contractor company, ceasing its trading operations, realising its assets and removing the threat of legal action from creditors. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed, your electrical contractors’ unsecured debt will be written off and the company liquidated, allowing you, as director, to move on.
More on Creditors Voluntary Liquidation - Close your electrical contractors down and start again via a Pre-pack liquidation
A Pre-Pack liquidation is an informal term for a type of CVL where the sale of your company’s assets is arranged before liquidation. This process would allow your electrical contractor business’ operations to continue seamlessly through the purchasing company. The company name may be reused where appropriate, and employees can transfer under Transfer of Undertakings (Protection of Employment) TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business’ operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
More on Pre-pack Liquidation
Commercial finance for electrical contractors
There are a range of commercial finance options designed to help companies struggling with cash flow, give them an equity boost, or to cover unpaid invoices. We can advise you on what commercial finance options might be viable for your company and can look in detail about which financial product will be most beneficial for your company’s circumstances.
More on commercial financeHow to get in touch with us: The next steps
If your electrical contractor company is facing financial difficulty, it’s important to understand the different closure and recovery options available. Our initial advisers will offer a comprehensive explanation of the different options available to you, and our experienced consultants will look at tailoring our processes to your company’s circumstances.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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