Business Debt Help
Company Voluntary Arrangement (CVA)
A legally binding agreement to repay creditors over time while your company keeps trading and you stay in control.
A Company Voluntary Arrangement (CVA) is a formal, legally binding agreement between a company and its creditors to repay some or all of its debts over an agreed period — typically three to five years — while the business continues to trade.
Where a company is fundamentally viable but weighed down by historic debt, a CVA can be a powerful rescue tool. It freezes creditor action, consolidates affordable repayments into a single monthly contribution, and gives the business room to recover.
How a CVA works
The directors work with a licensed insolvency practitioner (the nominee) to prepare a proposal setting out what creditors will be paid and over what period. Creditors then vote, and if 75% or more by value approve, the CVA becomes binding on all unsecured creditors — including those who voted against it.
Once approved, the practitioner becomes the supervisor, the company makes its agreed contributions, and provided the terms are met the remaining unsecured balances are written off at the end of the arrangement.
Is a CVA right for your company?
A CVA suits a business that is viable going forward but simply cannot service its existing debts. It depends on realistic, affordable contributions and the support of key creditors.
It is not a fix for a company with no prospect of trading profitably — in that situation liquidation is usually the more honest route. We’ll give you a straight answer about which applies to you.
The benefits and the risks
The benefits are significant: you continue trading, retain control of the company, stop enforcement action, and often deliver a better return to creditors than liquidation would.
The main risk is that if contributions aren’t maintained the CVA can fail and may then lead to liquidation — which is why the proposal has to be built on numbers the business can genuinely afford.
Frequently asked questions
Does the company keep trading during a CVA?
Yes — that’s the whole point. The company continues to trade under the directors’ control while making the agreed monthly contributions to creditors.
What happens if creditors reject the proposal?
If the proposal isn’t approved, the company is no worse off and other options — such as administration or a CVL — remain available. A well-prepared, realistic proposal greatly improves the chances of approval.
Will a CVA affect my suppliers?
A CVA is on public record and some suppliers may ask for revised terms. Many continue to trade with you, particularly where the alternative would be a worse outcome for them.
Can HMRC be included in a CVA?
Yes. HMRC is often a major creditor and can be bound by a CVA. Their view carries weight in the vote, so proposals need to be realistic and properly evidenced.
How is a CVA different from administration?
A CVA is a repayment agreement that leaves the directors in control. Administration places the company under the protection and control of an administrator. We’ll explain which fits your situation.
Company Voluntary Arrangement across Greater Manchester
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