If you are a pub or bar owner facing financial difficulties, it is important to seek insolvency advice as soon as possible. Insolvency is a legal term that refers to a company’s inability to pay its debts.
If you are struggling to pay your bills or keep up with your financial obligations, it is essential to address the problem before it gets worse.
There are several options available to help pub or bar owners who are facing financial challenges, including bankruptcy, liquidation, and restructuring.
It is important to seek the advice of a professional insolvency practitioner or financial adviser to help you understand your options and choose the best course of action for your business.
An insolvency practitioner can help you to understand your options and make the best decision for your business. They can also provide support and guidance during the process, ensuring that your business is treated fairly.
If you are struggling to pay your debts, an insolvency practitioner can negotiate with your creditors on your behalf. They can also help you to plan for the future, providing advice on how to restructure your business and avoid insolvency in the future.
If you are facing insolvency, seek professional advice as soon as possible to ensure that you make the best decisions for your business.
Insolvency Specialists in the pub and bar sector
In the United Kingdom, pub and bar insolvency specialists are licensed insolvency practitioners (IPs) who have significant experience in advising business owners in the food and beverage industry. According to a recent report by the Business Obstruction Taskforce, over half of all pubs and bars in England and Wales are insolvent.
This is a staggering statistic, and it highlights the need for specialist advice when it comes to pub and bar insolvency. The good news is that there are a number of experienced IPs who can help business owners navigate this complex and often treacherous process. These specialists will take into account the unique circumstances of each case and provide tailored advice on the best course of action.
In many cases, they will be able to negotiate with creditors to reach an agreement that is acceptable to all parties involved. If you are facing pub or bar insolvency, it is important to seek out the services of a specialist IP who can help you safeguard your business.
What problems are pub owners facing?
The typical problems that many pub and bar owners are facing include:
- People spending more time at home instead of going out to drink.
- The rising costs of employing staff.
- Cost of gas and electricity
- Increased rates and taxes.
- Competition from other pubs and restaurants.
- Lack of investment capital for refurbishments or marketing to generate more customers.
- Having to repay government bounce back loans
The problems are common within the public house sector, with profitability suffering due to problems like these, and a lot of pub owners are looking for the best way to close down their company.
Types of Insolvency for pubs
There are a number of types of insolvency for public houses in the UK these include:
Creditors’ Voluntary Liquidation
Creditors’ voluntary liquidation (CVL) is a process designed to allow insolvent companies to close down in an orderly way. The process is overseen by a licensed insolvency practitioner (IP), who acts as the liquidator. CVL is usually used when it becomes clear that the company cannot pay its debts and there is no realistic prospect of turning things around.
The main aim of CVL is to repay as much of the company’s debt as possible. To do this, the IP will sell off all of the company’s assets and use the proceeds to pay creditors. Any money left over after creditors have been paid will be distributed to shareholders. CVL can be a stressful and emotional time for those involved, but it can also provide some much-needed clarity and closure.
Company Voluntary Arrangement
A business CVA is a formal agreement between a company and its creditors to repay debts over an extended period of time. This arrangement can be used to avoid insolvency, or it may be used as part of a wider restructuring plan. CVAs are typically used when a company is facing financial difficulties but is still considered viable in the long term. The terms of the CVA are agreed upon by the company and its creditors, and they are binding on all parties involved. Once the CVA is in place, the company will make regular payments to its creditors according to the agreed-upon schedule. This type of arrangement can provide much-needed breathing room for a struggling company, but it is not without risk. If the company defaults on its payments, the CVA can be terminated, and the company may be forced into insolvency. As such, CVAs should only be used as a last resort after all other options have been explored.
How do I know if My Pub is Insolvent?
The insolvency test for is simple:
- Do you debts outweigh your liabilities?
- Can you pay your bills on time? If not, you are likely insolvent
Take a view of our insolvency test to confirm the figures
We’re here to help pub owner
If you are a public house business owner and struggling with historic debts, please contact us via the online enquiry form or simply make contact us on 01246 912052 where one of our insolvency specialists to talk though your options, all our insolvency advice for you and your pub is free of change.
We will offer a number of solutions to hopefully get you back up and running with out the pressures of debt.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.