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Published: 7th April 2020
As the coronavirus crisis continues, businesses are facing unparalleled challenges.
Whether financial uncertainty is the result of a sudden drop in trading activity, or cash flow taking a hit as invoices fail to be paid on time, it is vital these concerns are addressed.
A Company Voluntary Arrangement (CVA) could be an option for clients who have a viable business yet are suffering cash flow issues as a direct or indirect result of COVID-19. A CVA involves formal negotiations between a company and its creditors, resulting in a payment plan, or other settlement mechanism, which satisfies both parties. Creditors must agree to the proposed terms and, once approved, these become legally binding on all sides.
A CVA shields businesses from immediate creditor pressure, and allows vital breathing space to support a turnaround, thereby giving a company the chance to trade out of difficulties rather than succumbing to them. The legislation is drafted to allow the content and structure of a CVA to be highly tailored to specific circumstances. Our experts have been considering a ‘COVID CVA’ to deal with the specific issues being faced by businesses that have furloughed staff/entered into a mothballed state.
A successful CVA is one which offers creditors maximum returns yet is set at a sensible level sustainable by the company for the agreed period. A CVA proposal is drawn up by its directors, often heavily supported by a licensed insolvency practitioner who will also facilitate the negotiations and act as nominee, and then supervisor once the arrangement has been implemented.
With a nationwide network of over 70 offices, Begbies Traynor is perfectly placed to help you and your clients navigate these challenging and uncertain times. If you would like to discuss a CVA or any other form of business restructuring strategy, we are here to help.
Call our Confidential Advice Line. Calls to this number are free of charge.
Call us now...We invite you to come and discuss your enquiry with us at your convenience.
Request a meeting...Call our Confidential Advice Line. Calls to this number are free of charge.
Call us now...We invite you to come and discuss your enquiry with us at your convenience.
Request a meeting...Call our Confidential Advice Line. Calls to this number are free of charge.
Call us now...We invite you to come and discuss your enquiry with us at your convenience.
Request a meeting...