There's no money left. Or there's so little that the gap between what's in the account and what needs to go out this month is unbridgeable. You've been juggling for weeks — maybe months — and the balls have finally hit the floor.
This is one of the most terrifying moments in a founder's life. The financial pressure creates a physical response — chest tight, stomach churning, the constant mental arithmetic running in the background of every conversation. You can't think about anything else because the money problem colours everything.
Here's the thing: running out of cash isn't the end, even though it feels like it. It's a crisis point — one that demands immediate, clear-headed action. This guide is about what to do right now, this week, to stabilise your situation and buy yourself time to make good decisions.
Before anything else: breathe and assess
When the money runs out, panic takes over. Panic leads to frantic activity — selling things you shouldn't sell, borrowing at terrible rates, making promises you can't keep, avoiding calls you should answer. Panic makes a bad situation worse.
So before you do anything: stop. Make a cup of tea. Sit down with a piece of paper. You need ten minutes of clear thinking before you take any action at all.
The question you need to answer is simple but critical: how bad is it, exactly? Not "really bad" — that's a feeling, not a number. You need actual numbers.
What's in all bank accounts right now? What absolutely must be paid this week? What's due in the next 30 days? Is there any money coming in — outstanding invoices, recurring revenue, anything? What are your personal financial obligations separate from the business?
Write these numbers down. The act of making the crisis concrete — of converting the swirling dread into specific figures — is itself calming. You can't fight a fog. You can fight a number.
Immediate priorities: the first 72 hours
Payroll comes first
If you have employees, their wages are the first priority. Not because the law says so (although employment law does place significant obligations on you), but because these are people who depend on you and who have their own mortgages and families.
If you genuinely cannot make payroll, you need to have that conversation with your team immediately. Not by email. In person or by video. Be honest: "I'm not able to make payroll this month. Here's what I'm doing about it, and here's what your rights are." This is one of the hardest conversations you'll ever have, and it deserves its own guide — read What to tell your team when the business is going under.
If the company enters formal insolvency, employees can claim unpaid wages, holiday pay, and notice pay from the National Insurance Fund through the Redundancy Payments Service. Knowing this — and being able to tell your staff — doesn't make the conversation easy, but it does make it less terrifying for everyone.
Understand your legal obligations
When a company can't pay its debts, you have a legal duty as a director to act in the interests of creditors. This means: don't pay yourself ahead of other creditors. Don't sell assets to connected parties at below market value. Don't take on new credit you know you can't repay. Don't move money around to avoid it being available to creditors.
Most of this is common sense. But in a cash crisis, people do irrational things — including things that create personal liability. If you're not sure whether something is okay, ask before you do it. An hour with an insolvency practitioner now could save you years of personal liability problems later.
Read our full guide: Director duties during insolvency: what you need to know.
Prioritise your creditors
Not all debts are equal. Here's a rough priority order:
Employees — wages, holiday pay, notice pay. Both a moral and legal priority.
HMRC — VAT, PAYE, Corporation Tax. HMRC are a preferential creditor in insolvency and they have powerful enforcement tools. Don't ignore them. If you owe tax you can't pay, call their Time to Pay helpline early. They'll often agree to a payment plan if you're proactive.
Secured creditors — anyone with security over business assets (typically banks with charges over property or equipment). They have legal rights to seize assets.
Critical suppliers — anyone whose goods or services are essential to the business continuing to operate, even temporarily. If you need time to wind down properly, keeping the lights on and the internet working matters.
Unsecured creditors — everyone else. Suppliers, contractors, landlords (unless they have a charge). These debts matter, but they have less immediate enforcement power.
Buying time: what's actually possible
Running out of cash doesn't necessarily mean the business closes tomorrow. There may be ways to buy time — not to delay the inevitable if the business is genuinely finished, but to create space for orderly decisions rather than panicked ones.
Invoice what you can
Are there outstanding invoices you haven't sent? Customers who owe you money? Revenue that's been earned but not billed? Get those invoices out today. Even if payment terms are 30 days, at least the clock starts ticking.
If you have receivables that are overdue, follow up. Not aggressively — but clearly and firmly. "We're experiencing cash flow challenges and need to collect outstanding invoices promptly" is honest and motivating.
Talk to your bank
If you have a business overdraft or loan, talk to your bank before they talk to you. Banks generally prefer to work with struggling businesses than to pull the plug without warning. They may offer a temporary overdraft extension, payment holiday on loan repayments, or restructuring of existing facilities.
The key is to approach them with a clear picture of your situation and a realistic plan. "I need more money" is not a plan. "We have a short-term cash gap of £X caused by [specific reason], and here's how we expect to close it over the next [timeframe]" is a conversation a bank can work with.
Negotiate with creditors
Most creditors would rather receive partial or delayed payment than trigger an insolvency process. If you owe money you can't pay right now, call the creditor and negotiate. Options include: extended payment terms, partial payment now with the balance over time, temporary payment holidays, and settlement at a reduced amount (creditors sometimes accept less if the alternative is getting nothing in an insolvency).
The key word here is "proactive." Creditors who hear from you before they have to chase are far more likely to negotiate. Creditors who've been ignored for three months are far more likely to pursue legal action. For practical guidance on these conversations, read: How to talk to creditors when you can't pay.
Cut costs immediately
Review every line item of expenditure. What can be cancelled today? Subscriptions, memberships, unused software licenses, marketing spend, discretionary costs. You'd be surprised how much a business spends on things that seemed essential when revenue was flowing but are clearly dispensable when survival is at stake.
This isn't about saving the business through cost-cutting (if the fundamental model is broken, no amount of cancelling Slack subscriptions will fix it). It's about extending your runway — the time between now and when the money completely runs out — to give yourself space to make informed decisions.
Consider emergency revenue
Is there anything you can sell quickly? Stock, equipment, intellectual property, a customer list? Are there customers who might prepay for a discount? Is there a service you can offer on a consultancy basis while the business winds down?
Be careful here: if the business is insolvent or heading that way, selling assets at below market value can create personal liability for directors. But selling assets at fair value, particularly to raise cash for priority payments like wages, is generally fine. Get advice if you're unsure.
The decision point: close, restructure, or keep going?
Once you've stabilised the immediate crisis — once you've bought yourself a week or two of breathing room — you face the bigger question: is this business viable, or is it time to stop?
This is the hardest question in entrepreneurship, and we've written a separate guide for it: How to decide whether to close your business or keep fighting.
The short version: a business is worth fighting for if there's a credible path to profitability that doesn't require miracles. If the only way forward involves assuming that a major customer will appear, that a transformative deal will close, or that the market will suddenly shift in your favour — that's hope, not strategy. And hope is not a plan.
Protect your personal finances
When the business runs out of money, many founders instinctively start feeding it from their personal resources. Personal savings. Credit cards. Borrowing from family. Remortgaging the house.
Before you do any of this: stop. Understand what you're risking. Your business is (probably) a limited company, which means your personal liability is (probably) limited to what you've invested plus any personal guarantees. Pouring personal money into an insolvent business doesn't save the business — it just transfers the loss from the company to you.
There are situations where personal investment makes sense — if the business is viable with a short-term cash injection, if the amount is small relative to your personal resources, if you're genuinely confident in the recovery. But those situations are rarer than founders in crisis believe. More often, the personal money goes in and is lost alongside everything else.
Read our guide: Personal guarantees: what happens when your company can't pay.
Who to call
Business Debtline (0800 197 6026). Free, confidential advice for self-employed people and small business owners dealing with debt. This should be your first call if you're not sure where to start.
An insolvency practitioner. Most offer free initial consultations. They can assess your options: administration, CVA, liquidation, or informal arrangements. For guidance on choosing one, read: How to choose an insolvency practitioner.
HMRC Time to Pay (0300 200 3835). If you owe tax you can't pay, call this number to discuss a payment arrangement. Call early — they're more amenable to businesses that engage proactively.
Your accountant. If you have one, they should be one of your first calls. They understand your numbers and can help you assess the situation objectively.
Citizens Advice. Free, generalist advice covering debt, benefits, housing, and employment rights.
The thing nobody says
Running out of cash feels like a personal failure. Like you should have seen it coming, managed it better, been smarter with the money. And maybe there are things you'd do differently with hindsight. But cash crises happen to good businesses run by competent people. Markets shift. Customers leave. Costs rise. Investments don't materialise. Sometimes the money just runs out.
This doesn't make you a bad founder or a bad person. It makes you someone dealing with a financial crisis that requires practical action, not self-flagellation.
Deal with the money. Look after the people. Look after yourself. One day at a time.
Look after yourself in the cash crisis
I know this sounds like a strange thing to include in a financial guide. But cash crises are uniquely destructive to mental health because money anxiety is relentless. It's the first thing you think about when you wake up and the last thing before you sleep — if you sleep at all.
The physical symptoms are real: chest tightness, stomach problems, headaches, jaw clenching. The cognitive effects are real too: inability to concentrate, poor decision-making, irritability, memory problems. You're trying to solve a complex financial problem with a brain that's been compromised by the stress of the financial problem. It's an impossible loop.
A few things that help. First, contain the worrying to specific times if you can — give yourself a "worry window" of thirty minutes where you deal with the finances, then deliberately switch to something else. Your brain will resist this, but even partial success reduces the constant background anxiety.
Second, tell someone about the financial situation. Not just the business situation — the personal financial reality. The shame of money problems keeps people silent, and silence keeps people isolated, and isolation makes everything feel more catastrophic than it actually is.
Third, if you're not sleeping, read our guide on dealing with insomnia during business crisis. Sleep deprivation makes every financial decision worse.
And finally: remember that this is a situation, not a life sentence. Cash crises end — one way or another. The business either recovers, or it doesn't, and either way the acute financial terror subsides. You will not feel this way forever, even though it feels permanent right now.