The bank will probably rely on security for its lending to the company. This may be in the form of a debenture or a charge on a property. Secured creditors are excluded from the CVA and will not be affected by it.

But they often take it as a sign of the company’s frailty and may even recall any loans or overdrafts. This can also be the case with other lenders, such factoring and invoice discounting companies.

This withdrawal of facilities just when the company needs its finance can be a mortal blow.

Nevertheless, you will need to tell them.