You can get funding while your business is in a company voluntary arrangement, but the path looks different from a standard loan application. A CVA is a legally binding agreement between your company and its creditors that allows you to repay debts over a fixed period, typically three to five years, while continuing to trade.
Thousands of UK businesses operate under CVAs every year, and many still require ongoing working capital, equipment finance, or cash flow support while trading. The challenge is that most high-street banks will decline your application the moment they see an active arrangement on file. That does not mean funding is unavailable. It generally means accessing specialist lenders rather than mainstream bank funding.
What Is a Company Voluntary Arrangement and Why Does It Matter to Lenders?
The CVA is a formal insolvency procedure, governed by the Insolvency Act 1986, where a licensed insolvency practitioner proposes a repayment plan to your creditors. If 75% or more of your creditors (by value of debt) approve the plan, it becomes binding on all of them.
For lenders, the word insolvency triggers caution. It appears on your credit file and your company’s public record at Companies House. Most mainstream banks use automated credit scoring systems that flag insolvency markers as an immediate reason to decline.
But the situation is more nuanced than only considering a credit score. A CVA demonstrates that your business chose a structured, responsible route to manage its debts rather than simply folding. It shows creditors agreed your business was viable enough to keep trading. For alternative lenders who assess applications manually, these details matter.
Funding Options That May Be Available During a CVA
The alternative finance market has expanded significantly over the past decade, and several products can work for businesses in a company voluntary arrangement:
Invoice finance is often one of the most accessible options. Because the funding is secured against your outstanding invoices rather than your credit history, some lenders will focus primarily on the quality of your debtors. If you are trading, issuing invoices, and your customers have reasonable credit profiles, invoice factoring or invoice discounting may be available. The lender is essentially buying the right to collect payment from your customers, which shifts the risk assessment away from your company’s credit file and onto the businesses that owe you money.
Asset finance is another route worth exploring. If your business needs equipment, vehicles, or machinery, asset finance products like hire purchase or asset leasing use the asset itself as security. Again, the lender’s risk is partially covered by something tangible, which can make them more willing to look past an active CVA. Asset refinance, where you release funds tied up in equipment you already own, can also provide a cash injection without taking on unsecured debt.
Secured business loans, including bridging finance, may be available if your business or its directors hold property or other high-value assets. Bridging loans, in particular, are designed for short-term needs and are assessed primarily on the security and the exit strategy rather than a clean credit history.
Merchant cash advances work differently from traditional loans. A lender advances a lump sum and then recovers it by taking an agreed percentage of your future card payments. Because repayment flexes with your revenue, some providers are more open to working with businesses that have adverse credit, including those in a CVA.
Unsecured lending is typically harder to access during an active arrangement. Without security, lenders carry all the risk, and most will want to see the CVA completed or close to completion before considering an application.
How a CVA Differs from Other Debt Solutions
An individual voluntary arrangement, or IVA, works on similar principles to a CVA but applies to personal rather than business debts. If you are a sole trader, an IVA might be more relevant than a CVA because sole traders and their businesses are legally the same entity.
A debt relief order is another personal insolvency option, but it is designed for individuals with relatively low levels of debt (currently under £50,000 following the June 2024 threshold increase), minimal assets, and low disposable income. It is unlikely to apply directly to a trading business with funding needs, but directors sometimes have personal debt relief orders alongside their company’s financial difficulties.
Broader business debt management strategies can include informal negotiations with creditors, time-to-pay arrangements with HMRC, or simple restructuring of payment terms with suppliers. These approaches sit below the threshold of formal insolvency and will not appear on your credit file in the same way. If your situation has not yet reached the point of needing a formal CVA, exploring these routes with a financial adviser or broker first may preserve more of your future borrowing flexibility. Funding Bay works with lenders across invoice finance, asset finance, and secured lending markets.
What Lenders Actually Look At During a CVA
Alternative lenders will look at your current trading performance, including recent management accounts, bank statements, and revenue trends. They want to know whether the business is stable or growing now, regardless of what happened before.
They will assess the terms of your CVA itself: how far through the repayment period you are, whether payments are up to date, and how much of the original debt has been repaid. They will also consider the quality of any security or receivables you are offering.
Practical Steps to Improve Your Chances
Keep your CVA payments strictly up to date, as any missed payments will make lenders significantly more cautious. Prepare clean, current management accounts, including a balance sheet and profit-and-loss statement. Gather your last twelve months of bank statements and a schedule of all existing debt in the business. These are the documents most funders will ask for, and having them ready signals that you are organised and serious.
Be upfront about your situation. Trying to hide a CVA is pointless because it is a matter of public record, and being evasive will only erode trust with a potential lender.
