Is a CVA right for my business?

Whether a CVA is the appropriate solution depends on a number of factors and can only be determined by a full review of the financial position of the business.

It is important that directors seek advice as soon as they think there is a problem as there is a point at which a CVA may no longer be feasible.

In general if directors can answer the following questions with a yes or probably then a CVA could be appropriate:

Are all of the directors committed to trying to repay as much of the debt as possible?

Have the fundamental reasons for the difficulties been addressed or can they be addressed easily?

Will shareholders agree to the proposal?

Does the business have a good relationship with key suppliers?

If all debts are frozen can the business afford to continue to trade on a pro-forma basis for a period of time until confidence is rebuilt?

Will customers stay with the business if it goes into a CVA – consider the effect of any contract termination clauses?