Company Voluntary Arrangement (CVA)

A Lifeline for Struggling Businesses

If your business is facing mounting debts but you want to continue trading, a Company Voluntary Arrangement (CVA) could be the right solution. A CVA allows you to legally restructure your debts, making repayments more manageable while keeping your business operational. This formal insolvency process enables you to negotiate new payment terms with your creditors, improving cash flow and providing much-needed breathing space.

At Parker Walsh, we specialise in guiding businesses through CVAs, helping them avoid liquidation and regain control of their finances.

What is a CVA?

A Company Voluntary Arrangement is a legally binding agreement between a company and its creditors. It allows a business to:

• Consolidate its unsecured debts into a single affordable monthly payment
• Continue trading while repaying creditors
• Prevent further legal action such as winding-up petitions or bailiff enforcement
• Avoid director liabilities associated with wrongful trading

A CVA is approved by creditors and supervised by a licensed insolvency practitioner. Once in place, creditors cannot demand immediate full repayment, giving your business the stability it needs to recover.

Who Can Benefit from a CVA?

A CVA is ideal for businesses that:

• Are struggling with debts but still viable in the long term
• Need to protect cash flow while repaying creditors
• Want to avoid liquidation and continue trading
• Have unpaid bills to HMRC, suppliers, landlords, or lenders
• Are facing legal action due to unpaid debts

If your company is fundamentally strong but experiencing temporary financial difficulties, a CVA can offer a structured route to recovery.

How Does a CVA Work?

The process of setting up a CVA follows these key steps:

1. Initial Consultation

We review your company’s financial situation, identifying whether a CVA is the most suitable option

2. Drafting the CVA Proposal

A formal repayment proposal is drafted, outlining how debts will be repaid over a typical period of 3 to 5 years. This proposal must be realistic and sustainable.

3. Creditor Approval

The proposal is presented to creditors. If 75% (by debt value) agree, the CVA becomes legally binding on all unsecured creditors.

4. Implementation & Monitoring

Once approved, your business makes a single monthly payment, which is distributed to creditors. As long as payments are maintained, creditors cannot take further legal action.