A major UK home care provider, offering support to 13,000 older and disabled people, is seeking to transfer or sell all its contracts to other providers.
Allied Healthcare was warned this month by the care regulator about its financial sustainability.
Since then, some local authorities have already taken steps to find new providers.
The company says it is working closely with councils to ensure there is no disruption to people’s care.
Allied Healthcare provides services such as preparing meals, washing and giving medication.
Last week, the Care Quality Commission, which regulates such services in England, issued a notice – warning that it had serious doubts about the future of the company.
It was the first time the regulator had issued such a notice about the financial sustainability of a social care provider.
The CQC said it was concerned about the viability of services run by Allied Healthcare from the end of November and was warning councils to make contingency plans.
It said the company had failed to provide adequate assurances regarding future funding and there was now a credible risk of disruption to services.
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But a company spokesperson said on Friday that the CQC statement had “negatively impacted” the firm, led to some customers transferring care services to alternative providers, and disrupted staff retention and recruitment.
“These developments have intensified the impact of the challenging environment within which we operate and come immediately prior to the Christmas period, when pressures on care providers are at their highest.”
The company said it had to re-evaluate its long-term business plan and was exploring the sale or transition of services to alternative providers, including the transfer of staff.
The BBC understands it has now been able to extend its credit by three weeks from the end of November.
At the time of the CQC’s intervention, Age UK said the news was not surprising but still massively concerning and called on the government to grasp the situation and respond with the funding and reforms in England required to tackle it.
The Department of Health and Social Care spokesperson said at the time that the public should be reassured that local authorities had been given time to ensure continuity of care.