Do you believe your business could become profitable again? If your business has outstanding debts that it cannot currently repay but has the potential to return to profitability, a Company Voluntary Arrangement (CVA) could be your best option.
A CVA allows you to reach a legally binding agreement with your creditors to repay a portion of your company’s debt, usually in monthly repayments, over a certain time period.
This allows your company to gradually pay a certain proportion of its debts over time, allowing it to continue trading while paying its creditors.
Entering into a Company Voluntary Arrangement (CVA) also protects your company against potential legal action by creditors. It also allows your company to simplify its debt payments by combining several outstanding debts into a single recurring payment plan.
A Company Voluntary Arrangement (CVA) gives your company breathing room to repay its debts, avoid legal action by creditors and return to profitability. However, not all businesses are eligible or suitable for this type of arrangement.
Some of the requirements include that:
A CVA is a binding contract between your company and its creditors. Because of this, in addition to the above criteria, at least 75% of your creditors need to agree to the terms of your proposed arrangement in order for it to be accepted.
Does your company meet these criteria? If so, a CVA could be the ideal way to return it to profitability and repay your debts gradually while protecting yourself from any possibility of creditors pursuing legal action.
A Company Voluntary Arrangement (CVA) offers a wide range of benefits for your business. One of the biggest benefits of a CVA is that it gives yourself and your company some room to breathe while you focus on repaying creditors and recovering your business.
Entering into a CVA also protects your business from legal action launched by creditors or HMRC as long as it complies with the terms of the arrangement.
A CVA also simplifies your accounting processes by centralising all of your debts in a single payment each month.
Beyond simplifying your payments and allow your business room to breathe, a CVA can rebuild your company’s relationship with its creditors by ensuring they receive between 20% and 100% of what they are owed.
A Company Voluntary Arrangement (CVA) is a legally binding agreement between your company and its creditors. The process starts with your company preparing a CVA proposal, which outlines the terms of your company’s CVA.
To do this:
Once your Company Voluntary Arrangement (CVA) is approved, any legal actions creditors have launched against your company are stayed. Your company is required to make regular payments to a CVA trust to repay its creditors over the agreed upon time.
Do you think a CVA could save your company? We’ve helped hundreds of companies return to profitability and avoid going out of business using CVAs, and we would like to help your company get back on track using the same arrangement with creditors.
We have a team of advisers who have helped hundreds of businesses around the UK that have faced financial pressures on every scale. You are not alone.