Business rescue finance: funding a turnaround or restart
Business rescue finance covers two different moments. The first is preventative: a viable company under pressure raises working capital, refinances expensive debt or funds a tax bill so it never reaches formal insolvency. The second is the restart: after a liquidation or administration, a new company needs funding to trade, and it starts life with no trading history of its own. Different products fit each moment, from invoice finance and asset-based lending to VAT funding and refinancing. The one rule that governs everything is the order: a distressed company speaks to a Licensed Insolvency Practitioner first, because only that advice establishes whether the company should be rescued, closed or restarted. Finance comes second, and only where the plan the IP has advised on calls for it. This hub explains the map and links to the detailed guides. UK Finance; Insolvency Service, gov.uk
The order matters: advice first, finance second
If your company cannot pay its debts, the first conversation is with a Licensed Insolvency Practitioner, not a lender. An IP will establish whether the company is insolvent, which procedure fits, and what your duties as a director now are, including the personal risks covered on our wrongful trading page. Borrowing to prop up a company that has no realistic way back does not save it; it usually makes the position worse and can make you personally liable. Finance has a real role in rescue and restart, but it comes after that advice, as part of a plan. That two-step order is how the process is meant to work.
Phase one: funding that keeps a viable company trading
A company that is fundamentally sound but squeezed can often avoid formal insolvency with the right facility. The common moves are invoice finance to release cash tied up in unpaid invoices, asset-based lending against stock or machinery, refinancing to replace expensive short-term debt, and specific funding to clear a VAT or tax bill before it turns into a winding-up petition. The test an adviser applies is always the same: is the underlying business viable, and does the borrowing fix the actual problem rather than delay it? If the answer is no, the honest route is an insolvency process, not more debt.
Phase two: funding a restart after insolvency
When a company has gone through liquidation or administration and the director starts again legitimately, the new company has no trading history, and that shapes what funding is available. Invoice finance stands out here because the lender underwrites the creditworthiness of your customers rather than the age of your company, which is why a new company invoicing established businesses can often be funded from early on. The full picture, including the legal rules a restart must respect, is in phoenix company finance, and the regulated purchase route is covered on our pre-pack administration page.
Which product fits where
- Invoice finance: releases working capital before insolvency and can fund a new company trading afterwards
- Asset-based lending: suits asset-rich companies restructuring, and recapitalising a restart
- Asset finance (hire purchase or leasing): puts equipment and vehicles into an ongoing business or a restart without a large cash outlay
- Refinancing: replaces high-cost debt as part of a recovery plan
- VAT and tax-bill funding: clears an HMRC liability for an otherwise viable firm
Each product has its own guide in this series, and none of them is a substitute for insolvency advice where the company is already insolvent.
Where the money comes from
We do not lend, arrange finance or refer anyone to a lender or broker. For orientation, the market for a business with no trading history includes invoice finance and business loans aimed specifically at newly-started companies. One important guard: those routes are for a company whose old affairs have been fully dealt with. If your current company is still in, or heading into, an insolvency process, speak to a Licensed Insolvency Practitioner first.
The guides in this series
The funding side: phoenix company finance rules, invoice finance during a CVA or administration and HMRC arrears funding options, plus illustrative case studies showing how the pieces fit together. The legal spine sits on our core pages: phoenix companies and the name rules, pre-pack administration and wrongful trading.
Who we are, and what we do not do
LTD Turnaround is an independent information service. We do not provide legal, insolvency or financial advice. Insolvency questions are reviewed by our own editorial desk, which will point you to a Licensed Insolvency Practitioner where that is the right route. We do not lend, arrange finance or refer anyone to a lender or broker, and no lender, broker or practitioner pays us anything.
Reusing a company name, buying assets from a company you were a director of, or taking on new borrowing while the company is insolvent can carry criminal and personal liability risk. Before acting, take advice from a Licensed Insolvency Practitioner and, where a company name or disqualification question is involved, a solicitor.
Common questions
Can borrowing save an insolvent company?
Sometimes, but only where the underlying business is viable and the borrowing fixes the real problem. A Licensed Insolvency Practitioner should assess that first. Borrowing with no reasonable prospect of repayment can expose a director to personal liability for wrongful trading.
Can a new company get finance after the old one was liquidated?
Often, yes, provided the restart is done legally. Invoice finance is the most accessible route because the lender assesses your customers' creditworthiness rather than your new company's trading history. The restart must respect the section 216 name rules and the pre-pack rules where they apply.
Why does insolvency advice come before finance?
Because the law and good practice require it. Only a Licensed Insolvency Practitioner can advise on whether a company should be rescued, closed or restarted, and on the director's personal position. Whether any finance is suitable is a separate question for afterwards, between you and the lender or broker you choose. We do not refer anyone for finance.
Does LTD Turnaround lend money?
No. We are an independent information service. We do not lend, broker or advise. Insolvency questions are reviewed by us and, where appropriate, we point you to a Licensed Insolvency Practitioner. We do not refer anyone for finance, and no lender, broker or practitioner pays us anything.
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