CVA Finance for businesses: There are ways to get the funds you need

If creditors agree, your limited company can continue trading, paying off debts and returning to full profitability. This means that a CVA can be a vital tool in turning your business around. What's more, you can still raise funding under a Company Voluntary Arrangement

At Rangewell we want to help your turnaround succeed - by helping you secure fresh lending.

You still need finance. We can help you secure it.

We understand that many businesses can face cashflow problems for reasons beyond their control. Bad debts, lost contracts and demands from HMRC can all mean your business has difficulty paying creditors.

Sometimes these problems can become so acute that working with an insolvency practitioner and agreeing a CVA is the only solution. At Rangewell, we know a CVA need not be the end of your business. Many companies emerge from a CVA and go on to achieve profitability and growth, but it does mean an extra challenge. We can help.

Your business will still need a source of funding if you are to buy in stock and continue to trade. Existing lenders may be unwilling or unable to advance additional funds under the CVA arrangement. Finding new lenders who can help may seem impossible.

At Rangewell, we know lenders who can advance funding to companies under a CVA.

How we can help you

All business lending decisions are based on risk. If a lender assesses a borrower as presenting an unacceptably high risk that they will not be repaid, they will refuse to offer a loan.

The majority of business lenders are cautious, and set a low-risk threshold. They will simply not approve loans to your business while it is under a CVA.

At Rangewell, we have built close relationships with lenders throughout the business lending market. We know those who take a different approach to risk – and who may be prepared to advance the funds you need.

Security

To borrow additional funds under a CVA you will need security.

Providing security is a way of reducing the risk to lenders. You offer an asset of some kind as security, and give the lenders the right to take it and sell it to recover their losses if you fail to make the repayments on your loan. It could be business assets, such as your equipment and machinery, vehicles, stock, and inventory, or it could be your home.

Factoring & Invoice Discounting

If you have a large number of customers who owe your company money, you might use a Factoring or Invoice Discounting solution to restore your cashflow.

How it works

With Factoring, you sell your debtor book to a factoring company who then provide you with a working capital advance. This could be up to 95% advance against the total value of your debtor book. They will take responsibility for collecting what you are owed from your customers, which they will use to pay off their advance to you.

Asset Refinance

Your business has a range of assets, such as your vehicles and equipment, and if you own them, your premises. Asset Refinance lets you use the investment you have already made in your assets to raise the money now, while still having full use of all your assets.

How it works

The finance company will buy the asset from you for an agreed cost based on its value, providing you with the cash sum you need. They will then let you buy the asset back from them, with a new finance arrangement. You carry on using the asset without interruption, and at the end of the agreement, it becomes your property again.

You may be able to use Asset Refinance whether you already own the asset outright or are buying it under an existing finance deal.

Asset Based Lending, or ABL, works in a similar way to Asset Refinance, although it is actually a Secured Loan, secured against all the assets your business can put forward.

Secured Loans

Business Loans are the simplest forms of finance. You agree on a loan with a provider, who you paid back, with interest.

How it works

By providing security, you reduce the financial risk to the lender. This allows them to agree to the loan at an affordable rate of interest.

Stock Finance

If your business carries stock that is easily resold (such as retail or wholesale or where manufacturers hold stock for clients) then Stock Finance can be raised. The value of stock is usually much less than that on the balance sheet and lenders lend according to their own valuations.

How it works

The lender will value your stock, and use it as security for a cash advance, which you can repay as the stock is sold.

Recent examples of how we have helped

• Refinanced a small fleet of coaches – allowing the owners in a CVA to add new vehicles

• Sourced a refinance agreement for machinery without serial numbers for a company in CVA

• Set up HP on a truck to raise funds for a company in a Creditors Voluntary Agreement

• Arranged refinance across assets in an entire business to provide working capital, allowing a company in a CVA to repay all debts

• Helped a company in a CVA find a Factoring agreement

Why you need Rangewell

At Rangewell, we can work with you to develop a package of funding designed to help you out of financial difficulties, and help you find the most suitable lenders who will be sympathetic to your position, and offer the most competitive rates.

If you are working under a CVA, call us to discuss how we can help you find the funding you need.