Business IVA

Introduction to Business IVA

Businesses incur a lot of debt during the course of doing business. As long as the business is run well and the sales are continuing to do good the bills are able to be paid. What happens to a business when the debt overtakes them and they are not sure how to pay off all of their bills? When their debt problem is big enough they may have to consider other options like bankruptcy or a business IVA. These methods will help eliminate parts of their debt and bring it down to a manageable level.

If your business has a high level of debt that it is currently unable to pay off, you should seek the advice of a licensed solvency practitioner. They are knowledgeable in all of the different options available to your business and can look at your figures and be able to find the best solution. Many times, the best solution is a business IVA, where you enter into a binding agreement with your creditors detailing the payments agreements, including how much to pay and when to pay by.

What Happens to the Business with an IVA

If you plan on using a business IVA to help alleviate some of your debt it is very important that you find a licensed insolvency practitioner that specialises in business IVAs. This is important because he will be fighting to keep your business running. When you have a creditor’s meeting it is possible under the business IVA rules that the creditors will insist that you sell your business and all of its content in order to pay them back. This may not be the solution that you want, so you will need to explain to them why your business should stay open. Your insolvency practitioner will be able to design a proposal to help you with this.

Most creditors are looking for certain things when considering whether to keep a business going or shutting it down. Here are a few of these requirements.

• The business must be able to make their monthly payment to the business IVA arrangement and the owners must show a willingness to pay the creditors back.
• You must show that your business is capable of making a profit and you need to explain this to the creditors.
• You should have been in business for at least three years before needing to propose a business IVA.
• You will need to show them a business plan for the next three to five years, to show them that you can make a profit and you have set goals for the business.
• You must not have filed another business IVA for the last six years.

If you are able to show the creditors at the creditor’s meeting that you have a plan in action on how to make a profit. You must make them believe in your business and show them your confidence and that you believe in the business. An insolvency practitioner who specialises in business IVA is an essential part of your plan because he will be able to properly train you.