If your company has suffered financial decline and you are concerned about its future, a Fast Track CVA could be the answer. Company Voluntary Arrangements are formal insolvency procedures designed to support businesses fundamentally viable, but that require a financial breathing space.
This video explains how Fast Track CVAs work, the general eligibility requirements, and the benefits for all parties.
As the name suggests, a Fast Track CVA is a process that quickly provides businesses with an affordable way to repay their debts, whilst also offering creditors a better return than liquidation.
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It involves official negotiations between a licensed insolvency practitioner and the company’s creditors. A formal proposal is put forward and 75% of creditors (by debt value) are required to vote in favour for the CVA to go ahead.
If 75% or more of creditors approve the new arrangement, it also binds those that voted against it. CVAs are legally binding on all parties as long as the company meets its obligations under the agreement; otherwise you are at risk of being forcibly liquidated by a creditor.
This video also discusses the eligibility requirements for businesses wishing to enter a Fast Track CVA, with viability for the future being an essential element. Company Voluntary Arrangements generally last from one year to five years, depending on an individual company’s debt level.
One of the major benefits of Fast Track CVAs is the speed with which a business is supported, but the fact that debts remaining at the end of the term are written off also provides a fresh financial start for the company.
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