Company Voluntary Arrangements (CVA) are usually seen when large high street retailers are trying to reduce their ongoing rent or have some element written off.
They are however a useful process to help smaller businesses solve their problems while still being able to trade and without a sale of the business.
The key is that the business will be viable going forward and be able to generate profits that will enable it to make some offer of payment over a period of time, usually 3 to 5 years, to its creditors.
The payment needn’t be full repayment of creditor debt, but what the business can afford be that 20%, 50%, 80% or even full repayment over time.
The directors stay in control of the business throughout the process and creditor pressure is removed.
The business makes one monthly payment to the CVA.
As an alternative to ongoing payments from profits, it may be that a one off payment may be accepted by creditors if third party funds are available.
If a CVA can help your business survive, please contact us for free impartial advice