First question: is it secured?
Check the company’s filings at Companies House — registered charges are public. If the bank has a debenture, it has security over company assets, and that determines who controls what happens next.
A fixed charge covers a specific asset, usually property or plant. A floating charge covers changing assets like stock and debtors and locks down when things go wrong. A bank with a debenture can appoint an administrator without going to court, which in practice means it controls the timing.
The facilities that cause trouble
- Overdrafts — repayable on demand, whatever the informal understanding has been. The demand tends to arrive at the worst moment.
- Term loans — break a covenant and the whole balance can become due.
- Revolving facilities — reviewed periodically and withdrawn when a review goes badly.
- Invoice discounting and factoring — the funder usually owns the book debts. When the facility is pulled, working capital vanishes overnight. This is the most common cause of sudden collapse we see.
- Covid lending — different rules apply to each scheme. See Bounce Back Loans.
Set-off
If you bank where you borrow, the bank can usually use a credit balance to reduce the debt. Companies get caught by this at exactly the point they need the cash.
Guarantees
CBILS and Recovery Loan lending above certain sizes could be personally guaranteed. Bounce Back Loans could not. If you gave a guarantee it survives every route out of the company, including a sale — see Personal Guarantees.
Where a sale fits
Unsecured and partly secured facilities are within scope. Where a debenture holder is already driving the outcome, or the bank has appointed, a sale is generally not available and the question is one for a licensed insolvency practitioner.