Phoenix Company Restrictions and Invoice Finance UK 2026

A limited company set up by directors of a recently-insolvent company in similar or identical trade. Subject to section 216 of the Insolvency Act 1986 which restricts use of a 'prohibited name' (the insolvent company's name or any name the company traded under in the previous 12 months) for 5 years without court permission or specific statutory exceptions.

Yes, in most cases. Invoice finance providers conduct director CCJ and disqualification checks but accept phoenix companies provided: (1) directors haven't been disqualified, (2) no fraud or misconduct in the previous insolvency, (3) Section 216 compliance (proper notice or exception used), (4) director PG capacity is intact. Specialist insolvency-aware lenders handle these routinely.

Bibby Financial Services (broad insolvency experience), IGF Invoice Finance (sub-£500k phoenix businesses), Pulse Cashflow (construction phoenix businesses common in their sector), Hydr (selective spot factoring with manual underwriting). Banks and bank-owned providers (Aldermore, Close Brothers) are stricter — usually require 12+ months of clean trading from the phoenix company before considering.

Three exceptions: (1) Court permission (apply within 7 days of insolvency for permission to use the prohibited name), (2) Notice to creditors (within 7 days of insolvency, written notice to all creditors of the failed company stating intention to use the name), (3) Business succession (the new company has acquired the whole or substantially the whole business of the failed company from the insolvency office holder). Each route has formalities; mistakes can lead to personal criminal liability under section 217.

Often yes initially. Typical phoenix invoice finance pricing: 1.5-3% per invoice plus higher discount charge (3-5% above BoE base) for the first 6-12 months, dropping to standard rates (0.5-2% plus 1.5-3% above BoE base) after a watch period showing clean trading. Some lenders apply standard rates from day 1 for phoenix companies with strong director track record outside the failed business.

A pre-pack administration sale to a connected party (typically the directors' new company) is one of the section 216 exceptions if structured properly. The new company gets the business and the prohibited name on the basis of the business succession exception. Pre-Pack Pool referral required (since 2021 regulations). Invoice finance against the acquired debtor book is the standard buyer finance — see /guides/pre-pack-administration/.