If your business can’t pay its energy bills, you have various options. But you’ll need to proceed carefully, as a failure to pay bills when due is one indicator of potential insolvency.
You should also consider commercial gas or electricity a priority debt because the suppliers can easily switch off your supply which is going to seriously hamper your ability to run the business.
Follow the guidelines below to explore setting up a payment plan, increasing efficiency, or taking professional debt advice.
3 Steps If your Business Can’t Afford its Energy Bills
The cost of living crisis of 2022 means many businesses are struggling to afford their energy bills. In that scenario, you have 3 options:
(1) Get a Business Energy Payment Plan
Most suppliers are open to a payment plan where you can pay off your debts in monthly installments. Energy suppliers typically have a department which deals exclusively with payment arrears, which you’ll need to speak with.
In this conversation you’ll need to:
- explain your circumstances and the reasons you can’t pay
- agree how much the business can realistically pay on a monthly basis
- demonstrate that you can pay for your ongoing energy useage, while adding something towards your debt each month
(2) Energy Efficiency Grants for UK Business
While this won’t be a short term fix, taking advantage of grants available to green your business and make it more energy efficient is going to save you money, and provide a free injection of capital into your energy infrastructure.
There are currently some £5bn worth of grants available which you can find out about here: https://www.gov.uk/guidance/find-funding-to-help-your-business-become-greener
The Boiler Upgrade scheme offers up to £6,000 for UK small businesses to install a heat pump or biomass boiler: https://www.gov.uk/guidance/check-if-you-may-be-eligible-for-the-boiler-upgrade-scheme-from-april-2022
(3) Getting Help if your Business Can’t Afford its Energy Bills
If you cannot afford the installments on your energy plan, or your supplier won’t offer that to you because of credit history, you’ll need to take business debt advice from an experienced insolvency practitioner such as ourselves.
This doesn’t necessarily mean the company will be closed down. There are restructuring options such as administration or a company voluntary arrangement that would mean protection from creditor threats for the duration. Speak with us to learn more about options, via a free no-obligation conversation.