What is a Fast Track Company Voluntary Arrangement?

If the COVID-19 pandemic has put your business in financial distress and you need a viable and innovative company restructuring procedure to achieve financial stability, a fast-track company voluntary arrangement (CVA) could be the appropriate solution.

A fast-track CVA is a formal insolvency process that enables companies to negotiate the repayment of their company debt with creditors under time-sensitive conditions, with the assistance of a licensed insolvency practitioner.

Company Voluntary Arrangement (CVA) Explained

A Fast Track CVA is a modern and innovative company restructuring procedure that provides UK businesses in financial distress with a safety net during economic uncertainty.

It allows viable businesses to remain in control of their operations while ringfenced from creditor pressure.

This formal insolvency process is suitable for many small and medium-sized enterprises (SMEs) struggling with cash flow issues, creditor pressure, and unmanageable debts.

The process enables the company to negotiate the repayment of its debts in manageable instalments, giving the business the space and time to recover and thrive again.

A well-implemented efficient Fast Track CVA can be an excellent tool to steer previously profitable businesses out of financial difficulties and satisfy creditors.

The procedure can help company directors avoid personal liability and enable the business to continue trading while achieving CVA approval.

Why Consider a Fast-Track CVA?

At a crossroads where early advice can put a company on the road to recovery, failure to face financial commitments can lead to ruin.

A fast-track CVA can make a difference and is a highly effective tool for viable businesses.

The process avoids the expense and disruption of traditional CVAs, a major benefit. The Fast-Track Company Voluntary Arrangement offers an appropriate solution for companies with a genuine chance of succeeding but requiring help to recover.

Fast-Track CVA Advantages

With a fast-track CVA, a viable business continues trading, employing staff, and working with its supply chain.

Creditors will recoup more through a CVA than if the debtor went into liquidation.

The process can be completed in as little as six weeks.

When to Consider a Fast-Track CVA?

If a company is struggling with severe financial issues, unmanageable debts, squeezed cash flow, or an uncertain future, it is essential to take early professional advice.

With a fast-track CVA, a viable business can proactively take control of their company’s finances and obligations and remain in business.

It is an appropriate solution for UK businesses in financial distress.

Factors That Can Help You Decide If You Should Consider a Fast-Track CVA

Some key factors to consider when deciding whether a fast-track CVA is a right option include the following:

Your company is considered viable
HMRC filings and returns have been on time and within the rules and regulations
The CVA proposal is well-drafted and instils confidence in the process
Creditors have the potential to recoup more through a CVA than liquidation
Creditors are satisfied that there will be significant changes in management systems, finance systems, costs, etc.

How to Get Help with a Fast-Track CVA?

Suppose COVID-19 has severely hampered your business, and you are facing creditor pressure, HMRC debts, historical corporation tax, VAT debts, landlord liabilities, and/or supplier debts.

In that case, you should seek professional advice as soon as possible.

The Business Insolvency Company is available to help you in such cases.

A free consultation with our licensed insolvency practitioners will enable you to decide on your business’s best course of action.

All advice is free and 100% confidential.