Company Voluntary Arrangement

If your business is constantly hitting its overdraft limit or in arrears with payments to H M Revenue & Customs and other creditors, a CVA may be a way to save the business.

How it works

The company makes a regular (usually monthly) payment into the Arrangement, based on what it can afford. Unsecured creditors are asked to accept a reduced balance over a period of time, usually between 3 and 5 years. Secured creditors are excluded from the arrangement. Secured creditors could include the bank or leasing companies.

This way of dealing with an ailing business can be more favourable than liquidation. Creditors will normally get a better return in a CVA than in Liquidation, and it ensures business continuity.

What happens next?

To enable us to understand if a CVA is the best option, we will need detailed information on the current business. This includes detailed financial and trading information to enable us to give you best advice.

One of our directors will visit you to gather the information. The initial visit and advice is Free. We don’t believe in making your cash position any worse by asking for an up front consultation fee before we have assessed. When we have discussed all the options with you and it is agreed that a CVA is the best option, we will start the process of drawing up your proposal, contacting creditors and arranging a meeting of creditors. The whole process from start to finish usually takes 6 to 8 weeks.

Once the proposal is approved you only have one single monthly payment to make. If your business is seasonal, such as a seaside hotel or something similar, then a seasonally structured payment plan can be set up.

The main advantage of a CVA is that you stay in control of your business. At the end of the Arrangement, provided that you have made all the payments due, any outstanding debts to unsecured creditors are written off.