How can I save my business from going under?
I have heard about CVAs - what are they and how do they work?
If you want to save your business from going under 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 addition we can persuade HMRC, who are an unsecured creditor, that the business is viable and that they should support the company's restructuring plan.
In order for a company voluntary arrangement 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 finance team can help in putting this together.
So how can a CVA stop a business going under?
- CVA's can improve cashflow and cut costs, quickly.
- Stop pressure from tax, VAT and PAYE while the CVA is prepared.
- 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.
- 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
The main reason why this process is not used so much, is that there is much ignorance and prejudice around the process. We have a page called CVA worries that seeks to challenge these misconceptions.
Case studies where a CVA has saved the business
If you have read the case studies and the CVA worries page then please call us on 08009700539
Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.