What are the main benefits of a CVA for creditors?

For creditors, a CVA offers a more predictable and often higher return than liquidation. In liquidation, unsecured creditors typically receive little or nothing once secured and preferential creditors have been paid. A CVA, by contrast, ensures a structured repayment plan funded by ongoing trading profits or asset sales. It allows creditors to recover part of their debts while preserving their trading relationship with the company. This is particularly valuable for suppliers who wish to maintain a long-term customer rather than lose business completely. A CVA also ensures fairness, as all unsecured creditors are bound by the same terms, preventing preferential treatment. From HMRC’s perspective, supporting a CVA may maximise recovery and reduce disruption compared to forcing liquidation. While creditors may need to accept reduced payments, the arrangement usually provides a better outcome than enforcement action that results in closure. This balance of fairness and recoverability is why many creditors support CVAs when viable.