A Guide To Business IVAs

When you start thinking about how financing can have an impact on your business, one thing you absolutely must consider is an IVA and how it could potentially save you in a desperate situation. So how does this work? In order to successfully pull off this business IVA option, you have to be able to convince various creditors that you have a business that’s going to recover, even though you happen to be in debt at the current time. If creditors can get behind your business idea, then you certainly have a chance to see your business not only survive, but thrive.

Many people considering an IVA are also looking hard at the bankruptcy option. Though these two things are very different, they both offer relief for people who are in deep business debt. The key differences between these two have everything to do with what your business will be able to do after seeking the relief. With bankruptcy, a business is basically stripped of its ability to operate on a normal business schedule. With an IVA, business owners are more likely to get the type of support that they need from future creditors in order to keep the cash flowing into the business. Though this is still something of a challenge, it’s much easier with an IVA than with bankruptcy.

One of the primary conditions of a business IVA has to do with trade debts. If you happen to have them at the time you declare your IVA and you include them in your agreement, you have to make sure that you steer clear of similar debts in the future. Businesses unable to abide by this often have to think of different solutions. The entire premise behind the business IVA has everything to do with your business’s long term viability. If you are able to convince creditors that you can survive the downturn and that your business is heading up, then you can still operate your business effectively.

One of the challenges faced by business owners is that when they go with an IVA, they have to deal with business creditors who have little knowledge of the insolvency world. These creditors will typically close down the credit line and they will make life very difficult on individuals who have gone with an IVA. One way of getting around this is for business owners to open new, different accounts with credit suppliers or either change their current accounts to a cash option. This will help to relieve the pressure that is bound to come when business creditors shut down the lines of available credit.

If you are thinking about using an business IVA to alleviate some of your business’s debt issues, then you need to understand the various qualifications that you have to have in order to qualify for this. These requirements are:

  • It might seem obvious, but the business has to have both the willingness and the desire to pay back the creditors in full.
  • A business must have the ability to contribute to an IVA each and every month.
  • The business must be economically viable to the point where they are able to make the required IVA payments.
  • The ability to show the company’s latest VAT returns, tax returns, and trading accounts to the IP.
  • The ability to put together a long-term business plan that is convincing enough to persuade creditors to have at least some degree of faith in the business.

These things are not the easiest things in the world to pull off, which makes them something of a burden for many business owners. With that said, going with an IVA is something of an alternative process, so it makes sense that there would be requirements that might not be easy for business owners. With the right approach and the right communications ability, owners can pull this off.