What happens if your business cannot keep up the repayments?
This is the question most people considering an advance think about and few ask out loud. It deserves a straight answer, because the worst outcomes in this market come from borrowers who stayed silent while a problem grew.
What follows describes how a shortfall is normally handled, what a personal guarantee does, and the specific step that most changes the result. None of it is comfortable reading, and it is better read before you sign than after.
The repayment does not flex with your week
A revenue-based advance from Solvo repays a fixed weekly amount over 20 or 26 weeks. That is what makes the total knowable on day one — but it also means the payment does not fall in a quiet week. On a £25,000 advance the weekly figure is £1,850 over 20 weeks or £1,490 over 26.
This is the single most important thing to model before signing. Do not size an advance against a good month. Size it against your worst four weeks of the last year, and ask whether the payment still clears with room to spare.
If the answer is no, the honest options are a smaller advance, the longer term, or not taking one at all. A facility that only works if trading improves is a bet, not a plan.
What normally happens, in order
A missed or partial payment is not treated as the end of the road. In practice the sequence runs roughly like this:
- A failed collection is flagged. Someone contacts you to find out whether it is a one-off timing problem or something structural.
- A short-term arrangement is discussed. Where the shortfall is temporary and you have engaged early, rescheduling is usually preferable to everyone — a business that keeps trading repays more than one that does not.
- Formal default. If payments stop and contact stops, the agreement moves to default and the full outstanding balance becomes due.
- Recovery. That can include instructing a recovery agent, court action for the debt, and — where one was given — calling on a personal guarantee.
The gap between step 2 and step 3 is where borrowers lose the most, and it is almost always crossed by not answering the phone.
Personal guarantees: what you are actually signing
Our terms state it directly: directors may be asked to give personal guarantees, which can put personal assets at risk if the company does not repay. That sentence deserves to be read slowly.
A personal guarantee steps outside the company. If the business cannot pay, the guarantor is pursued personally — which can reach personal savings and, in the most serious cases, a home. Limited liability does not protect you from a guarantee you signed.
Our terms also say to take independent advice before giving one. That is not a formality. If a guarantee is requested, ask what it covers, whether it is capped, and whether it survives the facility being repaid — then have someone independent read it.
Why business finance has fewer protections
Funding to a limited company or LLP is, as our terms put it, generally not regulated by the Financial Conduct Authority, and protections that apply to consumer credit do not usually apply.
In plain terms: the cooling-off rights, affordability rules and complaint routes you may know from a personal loan or credit card largely do not exist here. The agreement you sign is close to the whole of your protection.
That is a reason to read it properly, not a reason to avoid business finance. But anyone who tells you commercial funding carries the same safety net as a consumer product is wrong.
The one thing that changes the outcome
Tell the lender early. Not when the payment fails — when you can see it coming.
A business that flags a problem three weeks out, with an explanation and a plan, is negotiating. A business that goes quiet and misses three collections is being chased. The facts of the shortfall may be identical; the outcomes usually are not.
If you are already behind and have not made contact, that call is still the highest-value thing you can do today.
Questions, answered plainly
Will missing a payment damage my credit file?
A default recorded against the business can affect its ability to borrow later, and where a personal guarantee has been called on, the guarantor can be affected personally. This is one reason to raise a problem before it becomes a default rather than after.
Can the repayment be paused if I have a bad month?
Our advances repay a fixed weekly amount over 20 or 26 weeks and are not designed to pause. Where a shortfall is temporary, the practical step is to make contact early — rescheduling is a conversation, not an entitlement, and it is far more likely to be possible before payments start failing.
What does a personal guarantee actually put at risk?
It steps outside the company, so the guarantor can be pursued personally if the business cannot repay. That can reach personal assets. Our terms say directors should take independent advice before giving one, and that is worth doing.
Is this type of funding FCA regulated?
Business finance provided to limited companies and LLPs is generally not regulated by the Financial Conduct Authority, and consumer credit protections do not usually apply. The agreement you sign carries most of the weight, so read it carefully.
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