Company voluntary arrangement

A Company Voluntary Arrangement (CVA) is like a deal between a company and the people it owes money to. It's like if you owe your friend some money for a toy and you can't pay it all back at once, you might ask your friend if you can pay some back each week until it's all paid off.

If a company is struggling to pay its bills, they might ask the people they owe money to (like their suppliers or the bank) if they can make a CVA. This would involve the company agreeing to pay back some of what they owe over a period of time, instead of paying it all back at once. The people they owe money to must agree to this plan.

For example, let's say a toy company owes a toy store $10,000, but they can only afford to pay back $5,000 right now. They might ask the toy store if they can make a CVA and pay back the remaining $5,000 in smaller payments over time. If the toy store agrees to this plan, the toy company will have more time to pay back what they owe and keep their business going.

A CVA can be a good option for a struggling company because it allows them to avoid going bankrupt or being forced to shut down. However, it's important to remember that a CVA is a legal agreement and both parties must stick to the plan.