Signs of insolvency and how to start a conversation with a client facing financial distress.
At Worrells, all too often, we meet with a client whose business’s restructuring options may be limited or no longer viable, as they have ignored the warning signs for far too long.
In 2026, ten key indicators of insolvency to look out for:
Continuing trading losses.
Outstanding taxes and other statutory liabilities.
Poor relationship with the current financier and an inability to borrow further funds.
No access to alternative finance.
Inability to raise further equity capital.
Suppliers placing the client on cash on delivery.
Creditors are being paid outside their normal trading terms.
Special arrangements with selected creditors (including long-term payment plans).
Solicitor’s demand letters, summonses, judgments, or warrants issued to the client.
Inability to produce timely and accurate financial information.
(see link to the factsheet on our website for detailed information on each of the following key indicators: Key Indicators of Corporate Insolvency Checklist | Worrells)
At your next client meeting, we recommend going through each of the above insolvency indicators as part of a comprehensive business health check.
If your client is ticking off a number of the above key insolvency indicators, it should prompt a further conversation about not only what short and long-terms plans are being put into place to deal with those identified issues, but also start a discussion about speaking with Worrells to address what the client’s options may be, should those well intended plans ultimately not work out.
Whilst this can be a difficult conversation to start with your client, bringing their attention to the above key insolvency indicators at an early stage can broaden the options available to them and, in many cases, will significantly improve the client’s prospects of a successful business restructure.
Also understanding how chronic stress and business financial challenges affects people and the hidden cost of debt are important considerations when helping the client navigate through the options available to them, which we always acknowledge and address through our empathic approach to insolvency.
Rely on our expertise, at Worrells, with 33 Principals across our 21 locations, every day we help individuals and businesses dealing with financial distress. Your local Worrells Principal is here to help (click here). If your client is dealing with the above key insolvency indicators, don’t hesitate to contact us for a complimentary and confidential discussion now.
