Yes, business funding is available during and after a winding-up order, but not from a high-street bank. The order appears on public records the moment it is advertised in The Gazette, and most mainstream lenders’ automated credit scoring rejects the application before a human ever sees it. Alternative lenders, asset-based facilities, and specialist brokers operate specifically in this space, assessing the business on current trading performance and asset position rather than the credit file alone.
What Is a Winding-Up Order and How Does It Happen?
A winding-up order is a court order that forces a company into compulsory liquidation. It is typically issued by the High Court after a creditor, often HMRC, petitions to have the company closed because it cannot pay its debts. The winding-up order process begins when a creditor serves a statutory demand for a debt exceeding £750, as set out in section 123(1)(a) of the Insolvency Act 1986. If the company fails to pay, dispute, or reach an agreement within 21 days, the creditor can file a winding-up petition with the court.
Once the petition is advertised in The Gazette, the UK’s official public record, the consequences are immediate and severe. Banks will typically freeze the company’s accounts to manage their risk under section 127 of the Insolvency Act 1986, which provides that any disposition of company property made after the presentation of a winding-up petition may be declared void. In practice, this often severely restricts the company’s ability to continue trading. If the court grants the order, an Official Receiver is appointed to take control of the company’s assets and affairs, as established under section 136 of the Insolvency Act 1986. From that point, the directors lose control of the business, and the winding-up order process of selling assets to repay creditors begins.
There is an important distinction between compulsory winding up, which is forced upon a company by the court, and voluntary liquidation, where the directors themselves decide to close the business. In a voluntary liquidation scenario, directors retain more control over the process and the timeline, which can affect how future lenders view the situation. A compulsory order signals to lenders that the business was unable or unwilling to resolve its debts before court intervention.
| Factor | Voluntary liquidation | Compulsory winding up |
| Initiated by | Directors decide to close the business | The court orders the company to close |
| Level of control | Directors retain more control over the process and timeline | Directors lose control; the process is managed by the court |
| Signal to lenders | Viewed more favourably, suggests responsible decision-making | Signals the business was unable or unwilling to resolve its debts |
| Court involvement | Minimal; largely director-led | Compulsory; driven by court intervention |
| Impact on future lending | Lenders may take a more flexible view | Lenders tend to view this more negatively |
Under insolvency law in the UK, the entire winding-up order process is governed primarily by the Insolvency Act 1986, and the Insolvency (England and Wales) Rules 2016, and the courts take a structured approach to ensuring creditors are repaid in a legally defined order of priority. Knowing where you stand within that framework is critical to understanding what comes next.
Why Traditional Banks Say No
If you have a winding-up order on your company’s record, whether historical or recently resolved, most high-street banks will decline your application. That doesn’t mean you’re out of options; business loans for bad credit are exactly what the specialist market exists to provide.”
Banks rely heavily on automated credit scoring and binary risk thresholds. A winding-up order, a County Court Judgment (CCJ), or any marker associated with company dissolution in the UK will trigger an automatic decline in most mainstream lending systems. The human context behind the event does not factor into those algorithms.
What Alternative Lenders Look at Instead
The alternative business finance market works differently. Many specialist lenders assess applications on a case-by-case basis. They want to understand what happened, why it happened, and what has changed since. Here is what matters to most alternative lenders when considering a business with an insolvency history:
Current trading performance. Lenders want to see recent bank statements, management accounts, and evidence that the business is generating revenue. A company that is trading profitably right now is a fundamentally different proposition from one that is still in distress.
The nature and outcome of the insolvency event. A winding-up petition that was settled before a court order was made tells a very different story from a full compulsory liquidation. If you successfully challenged the petition, paid the debt, or entered a Company Voluntary Arrangement (CVA) that has since been completed, these are all factors that work in your favour.
The asset position. If the business holds tangible assets, property, equipment, vehicles, or outstanding invoices, these can be used to secure funding. Asset-based lending is one of the most accessible routes for businesses with impaired credit histories because the lender’s risk is tied to the value of the asset, not the borrower’s credit file alone.
Director conduct and transparency. Lenders in this space expect honesty. Trying to hide a winding-up history will get your application rejected. Being upfront about what happened and demonstrating what you have done to address it builds confidence.
How a Broker Can Help
Handling a funding application with a winding-up order is significantly easier with a broker who understands the alternative finance market. A good broker does not just find you a lender; they package your application in a way that gives you the best possible chance of approval.
Funding Bay, for example, works with a network of over 200 lenders across the traditional and alternative finance markets. Our role is to match your funding requirements with the lender whose criteria best fit your circumstances. As an FCA-authorised broker (Reg No. 950847), we handle the application process from start to finish, helping to present your business’s numbers, narrative, and requirements in a way that aligns with how specialist lenders actually assess risk.
If you have been turned down by a bank and are unsure where to go next, a conversation with a specialist broker is a sensible first step. Your credit score will not be affected by your engagement with Funding Bay or any other broker, and it costs nothing to find out what might be available to you.
