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Benefits of a CVA


A Company Voluntary Arrangement (CVA) is a deal between the company and its creditors, which allows the company to repay some or all of its debts over an agreed period of time, without fear of legal action being taken by the creditors.

There are many benefits of using a CVA, here are just some of them:
The company can continue to trade whilst resolving its financial difficulties
Creditors are unable to take any further legal action against the company whilst in the process
It’s a constructive business rescue procedure
The process is often viewed positively by creditors
The process can improve cashflow
The business is given the breathing space it needs to deal with its financial difficulties
The process can quickly cut the companies costs
The process allows the business to restructure, therefore getting rid of unnecessary contracts and leases (this can often includes employment contracts and landlords leases)
The Directors remains in control of the business throughout the process
It’s a cost effective process and cheaper than liquidation
The creditors interests are often protected
The process allows structured payments to be made
Directors can initiate the CVA
The arrangement is legally binding
The business can continue trading, and can work its way out of debt
The business is given time to restructure the organisation so that it can return to profitability.
The directors conduct is not investigated as part of the procedure
The main purpose of a CVA is to rescue the company, protect cashflow and rebuild sales and profits. Once the company is back on its feet, it can then beginning to repay what it owes over a period of time.

A CVA is a constructive and positive process which gives the business an opportunity to turn itself around without the risk of further action being taken against it.

Getting advice from the professionals
If you are considering a CVA or think this may be the right process for you, it is worth getting some professional advice before taking any action. By working with professionals you can be sure that you are making the right decisions for you and your business. If a CVA is right for you, we can help you every step of the way.

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