Company debt advice for event businesses

Learn how to safeguard your events company from increasing expenses and fluctuating consumer preferences. Explore formal insolvency options like Company Voluntary Arrangement (CVA), Company Administration, or Creditors’ Voluntary Liquidation (CVL) to potentially rescue or cease operations.


Rescue, Recovery, and Closure Options for Events Companies

The events sector has faced significant challenges in recent years, impacting cash flow in the long term. Borrowing obtained during slow trading periods may become increasingly burdensome as operational expenses rise steadily over time.

If you’re considering the future of your events company, it’s crucial to fully comprehend all your options beforehand. This enables you to make informed decisions grounded in facts rather than just guesswork.

Based on your events business’s current financial status and its long-term sustainability, you might explore potential rescue and recovery strategies. These could involve restructuring existing debt, streamlining operational or financial structures, or securing essential funding.

However, it might be that the company’s liabilities are excessively high to manage. In such cases, exploring options for closing the company becomes necessary.


Considering Liquidation to close your events company? Explore your options! 

Shutting down an insolvent events company is accomplished through a Creditors’ Voluntary Liquidation or CVL. This formal insolvency procedure is instigated by the company’s directors and/or shareholders to conclude the affairs of an insolvent company in an orderly manner. An appointed licensed insolvency practitioner oversees the entire CVL process, guiding its execution.

One of the roles of the insolvency practitioner is to identify all company assets, such as property, machinery, vehicles, and stock. These assets are independently valued before being sold. The proceeds from the sales are then distributed among outstanding company creditors following a predetermined order of priority.

Any remaining debt after the company’s liquidation will cease with the company unless the directors have personally guaranteed any of the borrowings.

Although placing your events company into liquidation may not be a decision you’re eager to make, you have a legal obligation to prioritise the interests of your creditors over your own and your business’s once you acknowledge your company’s insolvency. 

By choosing liquidation, you’re ensuring the proper closure of the company while safeguarding your current creditors from enduring additional avoidable losses.

If your live events and entertainment business is facing financial distress, and you’re considering liquidation as the best option, seeking advice from a licensed insolvency practitioner at the earliest opportunity can clarify the situation. This ensures you make the right decision for all involved parties.

An insolvency practitioner can guide you through your options, including closing your events company via a liquidation process. They’ll help you comprehend the implications for your business, employees, and creditors alike.

If you believe your company can recover and return to profitability, your appointed insolvency practitioner will explore options for turning around your entertainment business’s current situation using formal restructuring methods.


How Can I Rescue My Events Business?

A struggling business doesn’t always signify imminent failure. If your events business is getting with rising costs and reduced income, there’s still a possibility of saving the business. 

Business turnaround isn’t a one-size-fits-all process. Every company, regardless of its industry, is unique, and the challenges it faces are specific to its circumstances. Therefore, a customised approach is essential to give the company the best chance of future success.

Revamping an events company may include negotiating with creditors to cut down future monthly costs and alleviate current pressures for payment. This negotiation could take place informally or through a legally binding insolvency procedure like a Company Voluntary Arrangement (CVA).

If negotiating with creditors isn’t feasible, initiating a formal insolvency process like administration could offer a lifeline for your business. Under administration, the company gains protection through a moratorium, preventing creditors from initiating legal action against it. 

Existing litigation is also temporarily stopped, allowing the appointed insolvency practitioner to form a plan without the threat of winding up looming over the process.

Executing a turnaround strategy depends on viability. This implies that your business must demonstrate the potential for success both presently and in the long term. 

Even if the revenue is lower than before, as long as it’s being generated, it can build confidence with creditors and support the turnaround process.

In a CVA scenario, creditors will be invited to vote on the proposed terms before the agreement can proceed. A minimum of 75% of creditors (by value) must consent to the arrangement and the proposed repayment amount for it to be approved.

For this to occur, creditors must have confidence in the company’s ability to adhere to the CVA throughout its duration. Since a typical CVA lasts for 3-5 years, convincing creditors of your long-term viability is crucial for gaining acceptance of the proposal.

In some instances, the company might face cash flow constraints due to the enforced closure period during lockdown. If business has bounced back, a cash injection might be all that’s required to revitalise the business and ensure overheads can be met as they arise.

We have a dedicated team of commercial finance experts who can collaborate with you to secure the funding you require. Leveraging our relationships with a range of high street and alternative lenders, we can identify the most suitable funding channel at a competitive rate.