A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
Insolvency for Manufacturing Companies
Manufacturing is a capital-intensive sector with long supply chains, significant fixed costs, and exposure to input price volatility. Cash-flow pressure can build quickly when orders slow, costs rise, or a key customer fails.
Our Manchester-based, ICAEW-licensed practitioners have experience helping manufacturing companies through financial difficulty.
Why Manufacturing Companies Fail
- Rising input costs - raw materials, energy, and wages
- Long payment cycles - waiting for customers to pay while suppliers demand prompt payment
- High fixed costs - plant, machinery, premises, and staff
- Order volatility - exposure to economic cycles and demand shifts
- Supply chain disruption - affecting production and costs
- Obsolete equipment requiring costly investment
Sector-Specific Considerations
Asset Values
Manufacturing companies often have significant plant and equipment, which can be sold - though second-hand values may be lower than book values, particularly for specialised machinery.
Asset Finance
Much equipment is on finance (hire purchase or leasing), which affects what the liquidator can sell. Assets on finance generally revert to the finance provider.
Stock and Work in Progress
Stock and work in progress can have value but may be difficult to realise, particularly for specialised or part-finished goods.
Your Options
- Negotiation with suppliers and customers to ease cash flow
- CVA - restructure debts while continuing to trade and fulfil orders
- Administration - protection while the business is sold as a going concern, preserving the plant, staff, and contracts
- CVL - orderly closure where the business is not viable
Speak to a Licensed IP
Manufacturing insolvencies need practitioners who understand the sector's cost structure and asset values. Our Manchester-based team will assess your position honestly and advise on the best route - free and confidential.