Typical situations
- Personal guarantees have been given on invoice finance, plant HP or a yard lease.
- A director's loan account has been used to bridge payroll or materials and may now be overdrawn.
- The board is unsure whether to continue completing live jobs.
- There is concern about personal exposure if a main contractor fails or a petition is served.
Personal exposure is common in contracting
Funders of construction businesses often ask for personal guarantees, especially around invoice finance, asset finance and property. Plant on hire purchase can also create a personal residual if the company cannot keep up the payments.
A company process does not automatically release those obligations. They should be listed, valued and discussed at the same time as the company's cash flow and creditor position.
Continuing to trade is a director decision
Completing a job can preserve value, or it can consume the last cash to the detriment of creditors. Construction makes that judgement harder because stopping mid-contract has its own cost: claims, bonds, snagging and reputation with employers.
The legal duties are the same as for other UK directors, and are explained on the general director support page and in our duties guide. This page is about how those duties show up on a contracting business.
Do not leave the personal position until afterwards
Once a formal process starts, the room to plan around guarantees and loan accounts is smaller. An early, confidential conversation is usually the more controlled way to understand what is company risk and what is personal risk.
Common questions
If the company enters liquidation, do plant guarantees fall away?
Not necessarily. It depends on the agreement. Asset funders may still look to the guarantor, especially if the plant is recovered at a shortfall. Those agreements should be reviewed before a process is chosen.
How does this differ from general director support?
The general page covers duties, guarantees and loan accounts for UK directors. This page focuses on plant finance, invoice finance, live-contract decisions and the personal exposure typical of contracting firms.
Related services
Construction cash flow
Deal with retentions, delayed payments, unpaid certified work and working-capital pressure across contracting businesses.
Construction HMRC debt
Address CIS, VAT, PAYE and Time to Pay issues that are specific to contractors and subcontractors.
Construction CVAs
Assess whether a CVA can work for a contractor once bonds, retentions and employer termination clauses are taken into account.
Construction liquidation
Close a contracting company in an orderly way, accounting for live jobs, plant and retention recovery.
Related insights
Personal guarantees when a business is under pressure
What UK directors should understand about personal guarantees if their company is facing cash pressure, restructuring or insolvency.
Director duties when a company is in financial difficulty
A clear explanation of how UK director duties shift as a company approaches insolvency, including creditor interests, continued trading and record-keeping.
