We have a great business, but cashflow is very poor. It can be a strongly viable company but we face threats from creditors. What can we do?"
There is a great solution for your company's problem called CVA or Company Voluntary Arrangement.
A CVA is a legally binding agreement with your company's creditors. What does CVA mean and how does a company voluntary arrangement work? This page will help you to discover what a CVA does, understand how it works and learn about the CVA tool and how it can help you stop creditor pressure and turnaround your company. Read our detailed guide for more free information, or you can download our free 82 page guide here.
If you do not wish to read through all the guides and info on the site then you can call our support centre on 0800 9700539 for a no obligation confidential chat. Read on to see the benefits of a CVA, and how it can help you.
Company voluntary arrangement or CVA benefits for your company
- Company voluntary arrangements (CVAs) can improve cashflow, quickly.
- Stop pressure from tax, VAT and PAYE while the CVA is being prepared.
- We can stop a winding up petition and get it adjourned using a CVA
- A company voluntary arrangement can rapidly cut costs. (see this case study)
- Company voluntary arrangements can terminate employment, leases, onerous supply contracts and all with NIL CASH COST.
- Also allows you to terminate property lease obligations and vacate premises with NIL cash cost (using our unique CVA expertise.) (see this case study)
- We write the deal, you run the company and get the UK's leading CVA experts working for you.
- You can terminate directors and/or managers contracts as well. CUT COSTS FAST!
- Remove employees with no redundancy payments of lieu of notice costs (paid by the Government)
- Terminate onerous customer/supplier contracts.
- Board and shareholders generally remain in control of the company.
- Has much lower costs than administration, is not publicly announced like administration is.
- You do not have to say you are in a CVA to your customers. ( see this case study showing this.)
- Finally, it is ALSO a good deal for creditors as they retain a customer and receive a some of their debt back over time, usually between 20 and 100p in every £1 of debts, depending on what your company can afford to pay back
- We can hive the business out to a new clean company, it can trade with customers and suppliers, old company gets a management fee to pay the creditors back.
- Check our CVA worries page if still unsure.
A simple description of a CVA!
CVAs are essentially a deal between the insolvent company and its creditors; This deal places a legal ringfence, called a moratorium, around the company and stops creditors attacking it. This allows a viable but struggling company to repay some, or all, of its historic debts out of future profits, over a period of time to be agreed.
Directors stay in control of the company, with KSA Group providing support. It can stop legal actions like winding up petitions, if you use a quality, experienced advisor. The directors need to be committed to saving the business. Also a company voluntary arrangement allows the opportunity for the business to be sold or refinanced.
The CVA process has been part of UK law since 1986 and is one of the Government's preferred rescue options.
Keith Steven talks about turnaround and CVAs with the Telegraph. Read the article "A solution to insolvency"
How it works in a time bar
Read what other directors have thought about the CVA mechanism
As we have now finalised the CVA for ********************* Limited I just wanted to drop a mail to say thank you to all of you and your extended team for all your support in the last 6 months.
I especially wanted to thank Marie I am sure she has been pulling her hair out with me at several points during the process but she has remained very supportive and professional throughout.
It has been a very difficult time for me but I have learnt a lot during this process but in a nice way I hope I will never have to use this service from KSA Group ever again!!!
I would highly recommend Keith Steven and KSA to anyone in the future that may require this type of service.
Again thank you to the whole team
7th September 2012
"Having tried and failed to negotiate a time to pay agreement with HMRC, we got in touch with KSA group in order to discuss our options on restructuring the debt we had. As a Managing Director responsible for the livelihoods of a group of people I'd spent years working with, this period was fraught with stress, worry and uncertainty. Finding the right partner to help us get back on our feet was singularly the most important decision in our company's history- and undoubtably by selecting KSA one we got right. Their experience and depth of knowledge of the CVA process was apparent from our first formal meeting, and they were able to deftly guide us through the process. Their people were responsive to our queries, empathetic with the situation we were in, and critically able to develop a document for presentation to creditors that undoubtedly made the difference between failure and success.
On a personal note, being able to trust your advisors to 'handle it' allows you to focus on the business- critical to getting out of the situation. I know firsthand the emotional turmoil and stress caused by the threat to your business, and if you are reading this and fancy a pint with someone who has been there and come through it, get in touch with KSA Group and I'd happily meet up for a chat."
December 27th 2011
Some recent high profile companies that are either in a Company voluntary Arrangement or CVA or have been reported to be looking at the mechanism to effect a rescue.
Ipswich Town FC
Salford City Reds
Tricor Plc ( issued shares )
Travelodge ( entered a CVA in October 10th 2012 )
So how much does it cost?
This does depend very much on the total number of creditors, employees, the bank's position, and what level of negotiation is needed. In the end, a company voluntary arrangement is a deal and doing a deal involves talking to people and the stakeholders in the business. It helps if the company has good financial information and there is not a compressed timetable due to aggressive legal actions by creditors. By acting early this can be generally avoided. So how do we pay if we are in financial difficulty? Simply, once we are instructed all the creditors deal with us and we can effectively freeze payments to creditors until a deal is done. Some advisors say that a company voluntary arrangement is paid for by the creditors. This is a bit misleading and it is likely that personal guarantees will be requested to cover the payments into the company voluntary arrangement and further fees. What happens then if it fails??? Err you will run up a large bill that you will be personally liable for. We do not ask for these personal guarantees. To discuss how much we charge then please call us on 01289 309431
If you want to discuss company voluntary arrangements online then go to our company voluntary arrangement discussion site.
Author: Keith Steven