CVA is tough option but beneficial in the long run

Date: 16th June 2009

The decision to take on a Company Voluntary Arrangement (CVA) rather than going into administration is a difficult decision to make but healthy in the long run.

That is according to R3, the Association of Business Recovery Professionals, which noted that the benefits of a business using CVA have arisen due to planned government action highlighting its advantages.

Steven Law, vice president of R3 and business recovery partner with Ensors, believed that companies could experience business recovery as a result of the process but not without difficulties in the interim.

He said: "I think [a CVA] is a tougher option. Everyone [has to] get used to the idea of dealing with a company in [a] CVA."

"[But] by keeping the company alive through the CVA it means that the [business's] shares are still alive and may even increase value in the future."

Mr Law went on to say that the company must not be on its "last legs" in order for a CVA to work.