Could a CVA be your business’s lifeline?
With already lighter mornings and evenings here and with Easter and British Summer Time on the horizon, it feels like 2025 is truly beginning.
And the thought of new beginnings might turn to your own business if you’re a director or business owner, especially if you’re trying to juggle and manage debts and arrears that are tricky to balance.
There are rewards for the companies that manage to solve this ongoing balancing act however – more cash flow; a stronger negotiating position with suppliers and creditors and, maybe even more importantly, a greater sense of peace and confidence in the future of the company.
This is where a Company Voluntary Arrangement (CVA) starts to make most sense.
What is a CVA?
Think of a CVA as a structured plan to help your business manage its debt while continuing to trade.
All debts are combined into a single amount, a proportion is usually written off and affordable monthly repayments are made on the remaining balance (usually over a five-year period) until it’s cleared.
It’s a proven way for a business to avoid closing through liquidation while getting its finances in order and giving it a real chance to recover
Company Voluntary Arrangements over the last five years
| Year | No. of CVAs |
| 2019 | 355 |
| 2020 | 260 |
| 2021 | 115 |
| 2022 | 111 |
| 2023 2024 | 186 202 |
Figures from The Insolvency Service
After a dip during the pandemic, CVA usage has seen a significant resurgence. In 2023, there was a dramatic 67.5% increase in the number of CVAs being taken up and 2024 has continued this trend, with numbers reaching a three-year high as more businesses are recognising the value of CVAs as a viable restructuring tool.
Why Choose a CVA?
- To Avoid Liquidation: Keep your business running and avoid the finality of closure.
- To Maintain Control: Unlike other insolvency procedures, you, as the director, remain in charge of your own business on a day-to-day basis.
- To Relieve from Creditor Pressure: A CVA provides a “breathing space” by halting legal action from creditors and will usually see a proportion of the overall debt written off to help the chances of the arrangement succeeding.
- To Protect Your Reputation: CVAs are not publicly advertised so clients and suppliers need not be informed.
Time for a spring clean of your business finances?
A CVA isn’t a magic wand, but it can be a powerful tool for businesses with a solid foundation and a desire to turn things around. It allows you to restructure and create a sustainable path to profitability while continuing to trade.
If you’re curious about how a CVA could benefit your business, we’re here to help. We offer a free, no-obligation consultation to discuss your specific situation. Get in touch and we’ll explore your options and see if a CVA is the right path for you.
Don’t wait until it’s too late. Take control of your business’s future and embrace the spirit of new beginnings this Spring.