Benefits Of A CVA

A CVA has several benefits over other insolvency procedures, not least because it enables the company to continue to trade, under the control of the directors and generally with the support of creditors and suppliers.

Benefits of a CVA at a glance

  • The company can continue to operate and trade as before
  • More time is given to resolve financial difficulties
  • It can be a positive step towards saving a business
  • Creditors are more likely to support genuine attempts to settle their debts
  • Cash flow can be improved as pressures to make payments are reduced
  • It is generally cheaper than alternative insolvency procedures
  • The process gives the appropriate time to restructure the business
  • The directors remain in control of the business
  • The conduct of the directors will not be investigated as part of the procedure

While there are obvious benefits to a CVA, company directors should ensure the company that has the ability to meet the terms of any proposals as failure to do so can result in the company being placed into compulsory liquidation.

A CVA can go a long way towards protecting cash flow and rebuilding sales and is often much less stressful than taking other insolvency routes because directors can feel in control of what is happening.

If you consider a CVA may be appropriate for your business, an advisor may help you make the right decision for the survival of your business.