Is this the situation you are facing?
- you have a great business that you have worked hard to develop
- cash flow is poor
- pressure from your Creditors is mounting
- the business can be a very viable concern
If that is what you are facing up to then a Company Voluntary Administration (CVA) could be the best solution for you.
The purpose of a CVA is to a company to reach a compromise with its Creditors, which may for example result in only 25% of its debts having to be repaid, either by the sale of certain assets or from income from future trading.
Your business is then released from the remaining 75% of its debts. If you can reach agreement with 75% of your Creditors the CVA will be binding on all of your unsecured creditors.
The Benefits of a CVA – they
- can quickly improve cash flow
- can ease the pressure you face from the Revenue while the CVA is prepared
- can quickly reduce your costs.
- can terminate Contracts of Employment, Leases, unattractive supply contracts
- can allow you to end a Lease at no cost and simply walk away
- can allow you to terminate Directors or Managers Contracts
- can allow you to get rid of Employees without having to make Redundancy payments as pay in lieu of notice is paid paid by the Government
- usually allow existing Directors and Shareholders to remain in control of the business
- are less expensive than an Administration or Receivership
- can be attractive to Creditors as they retain you as a customer and receive a dividend on their debts