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Is end of the CVA road in sight?

Recent statistics show that only 20 CVAs were sanctioned in Q3 of last year – a record low for any quarter in the last decade – leading many industry experts to ask whether the CVA has become obsolete.

The decline over the last year has been dramatic, down some 68% on the year before. In comparison, total insolvencies have reached their highest levels since the start of the pandemic, primarily due to a large rise in voluntary liquidations in recent months.

An initial takeaway from this is that all the retail and leisure businesses looking to undertake a CVA may have already done so, while the collapse in recent months of many smaller organisations due to pandemic pressures could explain the rise in voluntary insolvencies. There is little doubt that the gradual lessening of government support over the past two years has contributed to this trend.

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