Sports Centre Company Closure and Rescue Options
The sports and personal fitness industry can be lucrative in the right circumstances. However, the cost of maintaining licenses, keeping facilities up to date, and fluctuating membership levels can lead to challenging financial situations. If your sports centre company is experiencing a financial shortfall or other financial difficulties, you should seek insolvency advice to explore its potential options for closure or recovery.
This guide is designed to help you navigate the complexities of insolvency, offering practical advice tailored to sports centres. With the right knowledge, you can make an informed decision about your company’s future, whether it involves restructuring, refinancing, or winding down operations.
Common financial challenges for sports centre companies
We can help advise on specific financial issues that your company can face, including but not limited to:
- High operational costs
Your sports centre may employ a lot of people, from personal trainers and coaches to administrative and maintenance staff. Paying contracted employees’ salaries in line with minimum wage increases and invoices to freelancers charging their own rates can create a heavy financial burden. If that burden is impacting your company’s financial viability, speak to us for tailored advice on how best to proceed. - Regulatory issues
Keeping up with changes to health and safety regulations can lead to extra expense. Upgrading facilities and equipment to meet licensing requirements and extra training for staff can strain your company’s finances. Failing to comply with these required regulations can lead to fines for non-compliance, and the additional expense of challenging or paying them. Speak to us if you’re struggling to repay your company’s liabilities as and when they fall due. We can provide free, impartial, confidential advice on how to move forward. - Declining membership
If your sports centre offers paid memberships, a decline in subscriptions or an increase in cancellations can put a strain on the company’s finances. This could force your company to increase membership costs to cover the shortfall, which could, in turn, lead to even more cancellations. Speak to us if your company risks becoming insolvent due to declining revenue. The faster you act, the better your chances of achieving the best outcome for your company. - Bounce Back Loans (BBL)
The government’s Bounce Back Loan initiative was very important during the pandemic. However, companies are now having trouble repaying them. We can give you advice on what options you have when it comes to repaying the loan and how a BBL would be treated in various insolvency options.
How we can help rescue your sports centre
Below are two formal insolvency procedures which would allow your sports centre 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 allows companies to repay their unsecured debts in instalments tailored to what the company can afford monthly. It would allow your sports centre to continue its trading operations and to retain all your company’s goodwill and reputation with customers. When agreed to and in place, no further interest or charges are applied and creditors in the arrangement cannot take further legal action. The process lasts for up to five years, and on successful completion, any remaining unsecured debt in the arrangement is written off.
More on a Company Voluntary Arrangement - Restructuring the company through administration
By placing your sports centre into administration, it will be in a temporary state of protection that enables the business to continue trading. As licensed insolvency practitioners, we will take on the role of administrator, aiming to rescue the company as a going concern. This may mean restructuring the business, streamlining operations, making staffing changes or finding new investment. The administrator will also consider exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your sports centre
If your sports centre is insolvent and creditor pressure has reached a level which means the business cannot continue to trade, the liquidation of your company would draw a line under its operations and write off its unsecured debts.
- Closing your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure for companies that are insolvent. By entering a CVL, your sports centre would cease trading, and once closed, it would end all of the company’s obligations. The process would see your sports centre’s assets realised, while terminating outgoing payment agreements like loans and leases. Once the procedure is finished, any unpaid unsecured debts will be written off. If eligible, you as a director and employees 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 a Creditors Voluntary Liquidation - Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is an informal term for a type of liquidation where a company pre-purchases the assets of an existing company that is then liquidated. If your sports centre enters a pre-pack liquidation, it would allow you to continue the core business in a new or existing limited company without any historical unsecured debts associated to the previous company. With minimal disruption to the business’s brand, customer base and operational activity, the new limited company can retain essential assets, and under TUPE regulations you can also transfer key employees. 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 sports centres
If the company has an otherwise healthy cash flow, but a large, upcoming payment risks pushing it into the red, 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 fit your company.
More on commercial financeHow to get in touch with us: The next steps
If your sports centre is having financial difficulties, it’s important to understand the different closure and recovery options available to your company. 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 sports centre’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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