Haulage company closure and rescue options
Haulage companies operate in a complex and high-pressure industry, with financial challenges being a persistent risk. Rising fuel costs, fluctuating demand, strict and evolving regulatory requirements, and intense competition all contribute to the financial strains facing many haulage firms. If your haulage company is experiencing financial difficulties, it’s crucial that you understand the recovery and closure options available, and which would be best for your situation.
In this guide, we aim to provide clear and practical advice specific to the haulage industry. By understanding your company’s options, you can take decisive action to address its financial difficulties, whether that involves repaying, restructuring, securing additional funding, or closing down.
Common financial challenges for haulage companies
We can help advise on specific financial issues your haulage firm may face, including but not limited to:
- Fuel costs
Typically one of the largest expenses for a haulage firm, fluctuating fuel prices can have a significant impact on profit margins, especially when contracts are on fixed rates. If your company is struggling financially due to increasing fuel costs, we can advise on the recovery options available and if a payment plan could suit your company. - Maintenance and repair
The upkeep and maintenance of a fleet of vehicles is a regular, potentially high cost expense. Routine maintenance, unexpected repairs, and the need to replace ageing vehicles can strain your company’s finances. If you’re worried about your company’s cash flow, we can discuss the insolvency options best suited to your company. - Driver shortages and staff costs
The haulage industry is highly competitive. Businesses often struggle to find drivers and have to offer higher wages or invest in training programs to source a skilled workforce. We understand 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. - Compliance and regulations
There are strict legal requirements that are required to keep haulage vehicles and drivers compliant. Adhering to these standards, as well as new and changing environmental regulations all increase operational costs and can put pressure on your company’s finances. We can help assess your company’s solvent position and look at the most appropriate insolvency solutions. - 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 haulage company
Below are two formal insolvency procedures, which would allow your haulage business 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 structured repayment plan that enables businesses to manage their unsecured debts through affordable monthly payments to creditors. Lasting for up to five years, upon completing a CVA, the remaining unsecured debts at your company will be written off. By entering your haulage business into a CVA, the procedure provides your company with protection against creditors, giving you the opportunity to continue trading and to maintain the company’s strong brand and reputation, whilst slowly reducing the debt level.
More on Company Voluntary Arrangements - Restructuring your company through Administration
By placing your haulage company 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 your 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 possible exit strategies from the procedure, 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 haulage company
If your haulage company 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 haulage company via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure for companies that are insolvent. By entering into a CVL, your haulage firm would cease trading and once closed, would end all of the company’s obligations. The process would see your company’s assets realised and remove the threat of legal action. Once the procedure is finished, any unpaid unsecured debts will be written off. If eligible, yourself 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. - Close your hospitality 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 haulage company were to enter into a pre-pack liquidation, it would allow you to continue its core business in a new or existing limited company, without any historical unsecured debts associated to the previous company. With minimal disruption to your business’s brand, customer base and operational activity, you will be able to retain key assets to the business and under TUPE regulations, you can also transfer 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 haulage companies
If your company has steady cash flow but is at risk of being impacted by a significant upcoming payment, commercial finance could provide the support you need. There are several financing options that can help you manage one-time expenses or cover shortfalls in revenue. Contact us to explore the best commercial finance solutions tailored to your company’s situation.
More on commercial financeHow to get in touch with us: The next steps
If your haulage company is struggling to manage financial challenges, contact us to explore the options available to help address your situation. Our initial advisers can break down the recovery and closure pathways available, ensuring that you understand your options, and which is most appropriate. We’ll help develop a plan tailored to your business’s situation addressing the specific needs of its industry.
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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