• CVA Advice

Does your business have mounting debts?

Rather than give up on a great idea, lose a loyal workforce and end up liquidating your company, why not speak to us about a CVA (Company Voluntary Arrangement)? A CVA is a flexible and affordable way of dealing with company debt. If you feel that your business is worth fighting for, then a CVA is designed to help you to continue trading and allow you to repay your creditors over a realistic timescale with affordable payments based upon the profits you can generate.

A CVA is the smart way to deal with mounting business debt

A simple case of negative cash flow can bring even the most thriving of businesses into financial difficulty. It doesn’t take long for business debts to mount up, especially for fast growing companies that have to borrow to fund expansion, or where the company’s bankers are threatening to withdraw support.

Calling it a day and Liquidating the company should be a last resort, and a well drafted CVA proposal can bring the following benefits:

  • The company can continue to trade, thus preserving markets and jobs
  • The business can be restructured to remove loss making lines and concentrate on the areas which generate profit
  • The company should only pay back what it can afford
  • It may be possible to write-off some of the debts
  • Legal action can be stopped straight away
  • Unsecured creditors may no longer charge on-going interest on their debts
  • Cash flow can improve significantly

A CVA is a legally binding agreement, so it is important that you bring in a qualified and experienced insolvency practitioner to assist. At Jones Giles & Clay we have a team of Licensed Insolvency Practitioners and experienced staff who have the knowledge, experience and passion to help get your business back on track. We have helped many businesses to address their trading difficulties over the last few years, and the vast majority of those have continued to trade successfully.

Business debts can quickly add up and it is vital that you take action now before it is too late. Call us on 029 2035 1490 or enquire online for confidential CVA advice.

Please note that even if a CVA isn’t the most suitable course of action for your business, or your trading difficulties have become insurmountable, then we are still able to help. We deal with all types of business rescue and company turnaround solutions, as well as the more formal solutions of Liquidations, Receivership and Administration.

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More information

What exactly is a Company Voluntary Arrangement?

A Company Voluntary Arrangement (CVA) is a legally binding agreement that is used by a business that can no longer meet the repayments of its debts. The CVA establishes how much money the business can afford to repay to its creditors as well as a monthly payment plan. If accepted by the creditors, then new monthly repayment replaces the numerous existing repayments. Once the CVA has run its course (usually they last between three and five years) then the remainder of the debts should be written-off by the creditors.

Before the CVA is in place, a proposal is made by the directors of your company to the creditors and shareholders, providing a full disclosure of all the business assets and liabilities together with a proposition for enhancing the return to creditors. The proposal compares to that which creditors could expect to receive under other insolvency procedures, and usually involves delayed or reduced payments of debts, capital restructuring or an orderly disposal of assets.

Despite being a formal procedure under the Insolvency Act 1986, it is possible to build in as much flexibility in dealing with the company's assets and liabilities as is acceptable to creditors. A Company Voluntary Agreement usually allows the continued involvement of the company's directors in its own affairs, subject to review by a supervising licensed insolvency practitioner.

Why would a business use a CVA?

As the main alternative is liquidation, the reason most business directors choose a CVA is because they really believe in the value of their business and wish to continue trading. There are numerous reasons why many thriving businesses find themselves in an insurmountable level of debt, but it should not mean they have to close down.

For businesses with a viable future, a CVA can ease the pressures of debt and stop creditors taking court action, such as winding up orders or County Court judgements. Cash flow should immediately be more positive, as one easy and affordable monthly repayment takes over from the numerous debts.

How does the CVA process work?

The actual process after you enquire - either online or by calling us on 0808 168 9099 - varies depending on how ‘hands-on’ you want to be. It typically includes:

  1. A confidential discussion between yourself and one of our debt advisors. During this you will be made aware of the options available to you and we will offer advice that is tailored to your needs.
  2. Once you are satisfied with the advice and are happy for us to help manage your debt, a member from our team of Licensed Insolvency Practitioners will review your case to ensure that a CVA is the best course of action. If so, then they will require information on your finances and debts in order to start drafting your Company Voluntary Arrangement.
  3. Once the CVA is complete, we send it to you to make sure you are comfortable with the terms and, if so, you can either present it to your creditors for approval or we can do this on your behalf.
  4. If more than 75% of the creditors agree to the CVA then your repayments can begin and your business should be on the way to a debt-free future.

Throughout the entire process, the team at Jones Giles & Clay will be here to assist with any questions you have and are happy to offer advice on all aspects of business recovery and debt management. We manage the creditors and can do the talking on your behalf, leaving you to run your business.

Why use Jones Giles & Clay for your Company Voluntary Arrangement?

A CVA concerns the entire future of your business and is a legally binding agreement. It should therefore not be taken lightly and the advisor you choose should have the qualifications and experience needed to provide a genuinely beneficial and relevant service.

The team at Jones Giles & Clay are business recovery specialists and Licensed Insolvency Practitioners. We have the legal qualifications as well as the real world experience to prepare a CVA on your behalf. We take the time to learn about your business so that we can tailor our advice to suit your situation and create the greatest possible chance that the CVA works as a win/win situation for both your business and your creditors.

The team at Jones Giles & Clay have helped many businesses use a CVA to reduce debts and avoid repossession. Call us now on 029 2035 1490 or enquire online to start working towards a debt free business.

Why do creditors agree to a CVA if it means writing off debt?

CVAs have been a part of UK business recovery since they were introduced in the Insolvency Act 1986. Most creditors know how a CVA works and will be aware of the benefits in agreeing to one.

If a business is in the tough position where it needs a CVA, then the creditors can decide whether they wish to be a part of the agreement and receive a percentage of monies owed, or take separate legal action where they could risk losing the entire debt when the company is forced to close down and enter liquidation.

How do repayments work in a Company Voluntary Arrangement?

Your CVA will establish the best course of repayment, after a Licensed Insolvency Practitioner has reviewed the company’s current trading position and established the level of liabilities. Payments can be made from a number of sources, including a monthly amount taken from post-tax profits or a lump sum from either the sale or refinancing of an asset.

How is a CVA established?

Each CVA is unique and drawn up after looking at the specifics of a business, its trading difficulties and level of liabilities. The factors that are taken into account include:

  • Profitability
  • Available markets
  • The level of creditor support available
  • The number of creditors
  • The amount the business needs to retain each month to afford to trade.

When these figures are known, the CVA proposals can be drawn up and will show the repayment plan that should lead to creditors being repaid.

I need a CVA. How do we proceed?

Simply call us on 029 2035 1490 or fill in our online enquiry form and we will call you back. One of our licenced insolvency practitioners will run through your situation and offer relevant advice on your options and whether it is possible for your business to have a Company Voluntary Arrangement. If a CVA is suitable, then we will guide you through the process and act on your behalf, quickly and professionally.

Advice Line: 029 2035 1490

Why Choose us?

  • Accredited Advisors
  • Free advice
  • Nationwide Coverage
  • Professionals that are here to help
  • With you every step of the way

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