Factoring Facilities for Companies in a Company Voluntary Arrangement
A few years ago factoring companies seemed to be more short sighted than nowadays, as they weren’t interested in factoring the debts of a company in a CVA, a Company Voluntary Arrangement and if one of their clients entered into a CVA they were hurriedly asked to make alternative arrangements.
Nowadays it seems to have occurred to some of them that a company in a CVA is probably in a better financial position than some of their existing clients that are struggling on under huge pressure from creditors.One factoring company that three years ago gave immediate notice of termination to one of their client’s when they found out that they were thinking about a CVA is now actively marketing their desire to sign up more companies in this situation.
Purchase finance for companies in CVA
One major problem with a CVA is that having ring fenced the creditors with a legally binding arrangement to repay them a percentage of the total debt over a number of years, those same creditors will be loathe to extend credit once again to the company and the purchase of raw materials to continue trading becomes a financial problem.
Facilities are available for situations like this with the finance company arranging to purchase from the supplier in their own name. Repayment is normally made via a factoring facility when the goods have been sold.
At Factoring Solutions, we have a good relationship with these niche players, and know who can offer what type of funding to whom. Even more importantly our broking service can put you in touch with UK trade finance and factoring companies who are innovative enough to devise new ways to help where possible.