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How can I save my business? I have heard about CVA's - What are they and how do they work?

If you want to save your business then we can help. However, you must not underestimate how much discipline you will need to do this. A Company voluntary Arrangement or CVA allows the directors to stay in control and pay off creditors over time. The CVA protects the company against unsecured creditors from taking action against the company. Secured creditors, most usually the bank, will need to be convinced that the business will succeed and their position is not compromised. This is where we come in. We have an excellent record ensuring that the banks stay on board.

In order for a CVA to work the directors need to be absolutely focused on saving the business. This means that they will need to have a daily cashflow model, costs will need to be cut dramatically, and very importantly the directors must have a realistic view of potential future sales. Part of a preparation of a CVA is to put together financial forecasts for the business. Our Financial Director Andrew Hunter will help in putting this together. So what are the benefits. Summary below;

Company voluntary arrangements (CVA's) can improve cashflow, quickly.
Stop pressure from tax, VAT and PAYE while the CVA is prepared.
A company voluntary arrangement can quickly cut costs.
Company voluntary arrangements can terminate employment contracts, leases, onerous supply contracts and all with NIL CASH COST.
You can terminate landlords leases with NIL cost with a well written CVA! Unilaterally walk away from the lease, using our expertise.
You can terminate directors or managers contracts too.
Terminate onerous customer contracts.
Board and shareholders generally remain in control of the company.
Much lower costs than Administration or Receivership.
Finally, it is ALSO a good deal for creditors as they retain a customer and receive a dividend on their debts.

Print out our flowchart on CVAs here

So why are they not used more?

The main reason is that there is alot of ignorance and prejudiced thought around the process. We have a page called CVA worries that seeks to challenge these misconceptions.