Café and Restaurants Closure and Rescue Options  

Navigating financial difficulties in the café and restaurant industry can be daunting, particularly in a sector known for unpredictable customer demand and expensive operational costs, including rent, wages, and supplier payments. Whether you’re exploring closure or seeking rescue options to keep your doors open, understanding the insolvency processes available to you is crucial.  

This guide offers tailored advice on how to manage these challenges, providing you with the knowledge needed to make informed decisions about the best course of action for your café or restaurant. 

Common financial challenges for café and restaurant companies  

We can help advise on specific financial issues your café or restaurant may be facing, including but not limited to:  

• Lease and property management support  
  Cafés and restaurants typically operate under leases or carry substantial property-related obligations. We can offer insights on how you can negotiate with landlords and manage property issues during insolvency proceedings.  
• Cost control and supplier relationships 
  Expensive food prices, energy costs and wages, rising overheads can often leave cafés and restaurants short on cashflow and unsure of their solvent position. With possible debts building up to suppliers and lenders, we can help you assess whether your company is solvent and advise on the best procedures moving forward. 
• Employee relationship management  
  Cafés and restaurants rely heavily on staff and can sometimes find themselves with a high employee turnover. We realise the importance of ensuring that staff understand their redundancy pay entitlements and how a Transfer of Undertakings Protection of Employment rights (TUPE) would work during company restructuring.  
• Bounce Back Loans (BBL)  
  The government-backed Bounce Back Loan Scheme was a lifeline for businesses during the COVID-19 pandemic. However, many companies are now facing challenges in repaying these loans. We can guide you through your repayment options and explain how a Bounce Back Loan is treated in different insolvency scenarios. 

How we can help rescue your café or restaurant

Below are two formal insolvency procedures, which would allow your café or restaurant to continue trading whilst being protected from creditor action:  

• Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA) 
  A CVA is a formal payment plan between a company and its creditors that enables a company to manage their unsecured debts, by making affordable monthly payments their creditors. The process can last for up to five years and once concluded will write off the remaining unsecured debts. By entering into a CVA, your café or restaurant will be protected from creditors in the plan and will allow you to remain in control of the company, continuing to trade and preserving your brands reputation.
  More on Company Voluntary Arrangements
• Restructure your company through administration  
  By entering your café or a restaurant into administration, it will be in a temporary state of protection by a moratorium, that halts creditor and debt enforcement action, allowing the company to continue trading. We will act as administrator and try to rescue the business as a going concern, by restructuring your company into a leaner more profitable operation, with the potential of restructuring the company, by reducing staff costs renegotiating payment terms or finding new investors. The administrator will also explore potential sale options as a means of exiting the procedure, as well as alternative insolvency proceedings.
  More on administration

How we can help close and liquidate your café or restaurant company  

If your café or restaurant is insolvent and creditor pressure has reached a level which means the business cannot continue to trade, the liquidation of your café or restaurant would draw a line under its operations and write off its unsecured debts.  

• Close your café or restaurant down via a Creditors Voluntary Liquidation (CVL)  
  A CVL is a formal insolvency procedure designed for companies that are insolvent. The process would close your café or restaurant and cease its trading operations in an orderly and legally compliant manner. We will assess and realise the company’s assets, while terminating outgoing payment agreements, such as loans and leases and once completed, the process will write off unsecured debts and arrears. If eligible, employees and directors will be able to apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
  More on Creditors Voluntary Liquidation
• Close your café or restaurant down and start again via a Pre-pack Liquidation  
  A Pre-Pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The procedure would enable your café or restaurant to continue operating in a new limited company, without any historical unsecured debt of the previous company. With minimal disruption to the business’s brand, customer base and operational activity, your new limited company could retain key assets such as leases equipment and transfer employees under TUPE regulations. In some cases, you may be able to reuse your company’s trading name, but this can be complex. We can advise you on these processes and how it works.
  More on Pre-pack Liquidation

Commercial finance for café and restaurant companies  

If your company has an otherwise healthy cash flow, but a large, upcoming payment risks push you into a negative position, commercial finance could be a viable solution. There are a range of finance options potentially available that can help cover a one-off expense or a gap in the company’s incoming payments. Speak to us for a more detailed breakdown of which commercial finance options best fits your company.  

How to get in touch with us: The next steps  

If your café or restaurant 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.  

1. 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.  
2. Initial Assessment 
   During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available.  
3. 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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