Galley Beggar Press, the tiny literary publisher behind acclaimed novels including the Booker-shortlisted Ducks, Newburyport and women’s prize for fiction winner A Girl Is a Half-Formed Thing, has been forced to make a public appeal for support after the Book People’s fall into administration left it with a £40,000 hole in its finances.

Galley Beggar’s co-director Eloise Millar turned to crowdfunding on Wednesday to ask for urgent help from readers as it faces “the biggest crisis in its seven-year history”. The publisher entered into a partnership with the discount retailer earlier this year when Lucy Ellmann’s novel was shortlisted for the Booker. Galley Beggar produced 8,000 special editions of the novel, costing it around £40,000.

Millar said that Galley Beggar would “never normally take the risk of having someone owe us £40,000”, but it had been “made to understand that everyone on the shortlist would need to supply an edition … It was a sizable undertaking. It’s the sort of money that we never normally play with, but it was part of the schedule and the competition and when Ducks, Newburyport made the shortlist, we did it.”

Dotti Irving at Four Culture, which handles PR for the Booker prize, said in a statement: “I’d like to make clear that there is no commercial relationship between the Book People and the Booker prize and that no pressure has ever been put on any shortlisted publisher to take part in the Book People promotion.”

On Wednesday morning, the Book People was offering the six-strong Booker shortlist, whose recommended retail price would be £111.97, for £35.99 – a saving of £75.98.

Galley Beggar was due to be paid after Christmas, according to Millar, who said the money would “have allowed us to pay the many print bills that the Booker has involved … and set us straight for the new year”.

But after talking to the Book People on Wednesday, Galley Beggar was told it would not be paid in the immediate future, with all payments to suppliers understood to be frozen. This has forced the publisher to turn to the public for help or risk shutting down.

“[This] has turned what should have been the best year of our little company’s life into its worst – and something that might kill it. So we need your help. We hate to ask for charity,” wrote Millar in its appeal. “But at this point, we can’t see a way around.”

Less than an hour after the fundraiser launched, Galley Beggar had raised more than the £15,000 it initially asked for. It subsequently raised the goal to £40,000 with funds quickly exceeding £30,000. Fellow publishers, authors and booksellers are rallying behind the Norwich-based publisher, with donors including the National Centre for Writing and Arts Council England’s literature director Sarah Crown.

“Viewed in isolation, Galley Beggar is an exceptional force in British publishing. Viewed in context, they’re an essential component of a broad and interdependent ecology that is better, richer and brighter because of them. Supporting them benefits all of us,” said Crown.

Fellow publishers including Tinder Press and Peirene also chimed in. “Big prizes penalise indie presses by requiring huge upfront print-run commitments, then when a part of that chain goes bust it’s the press that suffers – help Galley Beggar!” tweeted the latter.

The Book People, which was founded in 1988 and offers cheap deals on a wide range of books, was placed in administration on Tuesday, putting almost 400 jobs at risk. Administrators have said that there will be no immediate job losses, with Christmas orders already placed by customers set to be fulfilled. When asked whether payments to suppliers were frozen, they declined to comment further.

“While the administrators have funding to meet the payroll for December, the longer-term prospects for the business, staff, customers and suppliers will clearly be dependent upon whether a sale can be secured,” said Toby Underwood, joint administrator.