Any business can be adversely affected by today’s unpredictable economic environment. Therefore, it is essential that companies recognise when their business is at a critical juncture so that they can take measures which might prevent them from going under completely.
Company Voluntary Arrangement (CVA)
A CVA can be used when a company is unable to continue to trade successfully because of the burden of its debt. A CVA basically involves reorganising a company’s debts so that their repayments are more affordable.
Business Refinancing
Today’s bank lending policies can often make it hard for struggling companies to raise the money they need to keep their businesses operating. However, business refinancing methods such as asset financing, trade financing and invoice financing can be very effective alternatives to the more established financial channels.
Also known as ‘Phoenixing’, this process involves forming a new company to buy the assets from a failing business. The new company is then free to trade without the burden of the old company’s outstanding debts. The old company is simply liquidated and the proceeds from its sale are distributed amongst its creditors.
Administration
Any struggling company which is under threat of being wound up by its creditors can apply to be put into administration by its directors or shareholders. This can provide a valuable ‘time out’ so that a viable financial solution might be found.
To learn more about these solutions, get in touch with us here at Cooper Matthews today.
Tags: business debt, Company Voluntary Agreement services, phoenixing, pre pack administration
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