What is a Fast-Track Company Voluntary Arrangement (CVA)?
A Fast-Track Company Voluntary Arrangement is a formal insolvency process that allows you to negotiate a cost-effective payment plan with creditors under time-sensitive conditions. A Fast-Track CVA is a suitable rescue option for businesses impacted by COVID-19 and requiring a prompt recovery.
Fast-Track CVAs
Despite businesses across the UK gradually reopening after the lockdown, they are facing an entirely new landscape and an unprecedented array of challenges. While trade has been severely affected for months, overheads have persisted, and numerous businesses lack the cash flow to meet current obligations.
This epitomises insolvency—a situation many companies encounter through no fault of their own. If your business is grappling with challenges post the COVID-19 lockdown, which has halted the UK economy, seeking early advice is imperative.
Is a Fast-Track CVA the answer?
Depending on the seriousness of your company’s financial situation, the threat of insolvency can often be seen as a crossroads where early advice can guide you towards recovery, while neglecting your financial commitments may lead you down the path to ruin.
By actively seeking advice, there are often more rescue options available for your company—one of which is a fast-track Company Voluntary Arrangement (CVA), allowing you to maintain control of your company’s operations while being shielded from creditor pressure. A CVA needs approval from 75% of your company’s creditors, and usually, they are willing to do so as CVAs offer a better chance of recovering their money compared to a liquidation process where they might end up with nothing.
You continue with the day-to-day running of the business as usual, but your payment obligations are rescheduled to a level that you can afford.
Bob Maxwell, a Partner at Vanguard Insolvency and an expert in company restructuring, states:
“A fast-track CVA is a formal insolvency process with the adaptability to navigate through these unprecedented times. Businesses across the UK are facing challenges, but many of them are viable if given the chance to survive – and this is precisely what a fast-track CVA can offer.
“Hundreds of thousands of companies are surviving purely on borrowed time through loans, deferring VAT, delaying landlord payments, and so forth. All of these issues will surface again in the short to medium term, and if businesses wait until that point to seek advice, it might be too late.”
Bob, with a wealth of experience in rescuing UK companies on the brink of financial distress, highlights how a proactive approach, rather than a reactive one, is crucial in safeguarding the future of previously profitable businesses.
“If a company genuinely stands a chance of succeeding going forward, a CVA can be a highly effective tool and bring benefits to both debtors and creditors. A fast-track CVA avoids much of the expense and disruption of traditional CVAs and can make the difference between success and failure. We can promptly assess whether the business is eligible following a free consultation with directors. If so, a fast-track CVA will enable the company to continue trading, employing, and collaborating with its supply chain, while creditors will recoup more through a CVA than they would if the debtor went into liquidation.”
Read More:
- Negotiating a CVA With Creditors
- Company Voluntary Arrangement CVA
- How are employees affected in a CVA
- CVA vs liquidation
- CVA debt write off
More information
If your business has been significantly affected by COVID-19 and you’re encountering creditor pressure, HMRC debts, historical corporation tax, VAT debts, landlord liabilities, and/or any supplier debts, it’s crucial to seek professional advice at your earliest convenience. A swift-track CVA can inject fresh vitality into your business, and the process can be finalised in as little as six weeks.
For a complimentary consultation with Bob or a member of his expert restructuring team, get in touch with Vanguard Insolvency today. All advice is free and entirely confidential.
I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.