Estate agents closure and rescue options
Running an estate agency presents its own set of unique challenges specific to the housing market, including navigating fluctuating property markets, managing rising operational costs, and maintaining steady cash flow amidst delayed transactions. For many estate agents, these financial pressures can escalate, making it important for directors, like yourself, to explore the insolvency options available.
This guide is designed to offer clear and practical advice tailored to estate agents. By understanding your options, you can take decisive steps to address potential financial challenges, whether that involves restructuring your business, securing additional funding, or exploring closure solutions.
Common financial challenges for estate agents
We can help advise on specific financial issues your estate agency may be facing, including but not limited to:
- Fluctuating Market Conditions
The property market is heavily influenced by external economic factors such as interest rates, inflation, and government policies such as stamp rate, tenant, and landlord regulations. These market changes can have drastic effects on estate agents’ income and liquidity, leaving many companies vulnerable to cash flow issues. We can help you navigate these issues and advise on the most appropriate insolvency options. - Intense Competition
The rise of online estate agents and budget alternatives has changed the traditional housing marketplace, forcing traditional agents to lower their fees to stay competitive. These reduced margins can make it challenging to cover operational costs while delivering the high-quality service that clients expect. If the additional competition has negatively affected your revenue streams, we can help you understand your solvent position and advise on the best solutions available. - Marketing Expenses
Effective marketing is essential for estate agents to attract new clients and showcase properties. However, digital advertising, property portal subscriptions, professional photography, and social media campaigns can all add up, increasing financial strain on the business. - Delayed revenue streams
The lengthy process of completing property sales or securing tenancy agreements can lead to delays in commission payments. This often creates a financial gap, particularly for agencies that rely on timely revenue to meet day-to-day expenses. We can help you explore the commercial finance options and look at those best suited to your company. - Bounce Back Loans (BBL)
The repayments for the government backed BBL initiative are in full effect, after the grace period during the COVID-19 pandemic allowed extended repayment terms. We can help you navigate the repayment options available and help you understand how the loan would be treated in an insolvency procedure.
How we can help rescue your estate agency
Below are two formal insolvency procedures, which would allow your estate agents 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. It allows you to restructure your company’s unsecured debts while continuing to trade by making affordable monthly payments over a fixed period. Once you and your company’s creditors confirm the agreement and the process is actioned, 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 on successful completion, any remaining unsecured debt remaining in the arrangement is written off.
More on Company Voluntary Arrangements - Restructure your company through administration
Administration is an insolvency procedure for companies. Entering the procedure means your estate agents will enter a temporary state of protection, given by a moratorium that halts creditor action, including legal proceedings, giving your company the 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 estate agents
If your estate agency is insolvent and creditor pressure has reached a level which means the business cannot continue to trade, formal liquidation would draw a line under its operations and write off its unsecured debts.
- Close your estate agents 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 estate agency, ceasing its trading operations, realising the company’s assets and removing the threat of creditor legal action. 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 estate agency’s unsecured debt will be written off and the company will be dissolved, allowing you, as director, to move on.
More on Creditors Voluntary Liquidation - Close your estate agents 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 estate agents’ business operations to continue seamlessly under the purchasing company. The company name may be reused, 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 estate agents
There are a range of commercial finance options designed to help companies struggling with cash flow, give them an equity boost, or cover unpaid invoices. We can help 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 estate agents 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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