Business Finance with an IVA | Active & Discharged IVA Lending

Business Finance During or After an IVA

An Individual Voluntary Arrangement — whether active or recently discharged — creates specific challenges when seeking business finance. We understand those challenges. We introduce UK business owners and directors to specialist lenders who work with IVA situations, both during and after the arrangement.

What is an IVA and how does it affect business finance?

An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement between an individual and their creditors to repay a proportion of their debts over a fixed period — typically five to six years. It is arranged by a licensed insolvency practitioner (IP) and, once approved by creditors, binds all unsecured creditors to its terms.

An IVA is a personal insolvency procedure — it applies to individuals, not limited companies. However, it very directly impacts business owners and directors because it appears on their personal credit file, restricts their ability to take on new personal credit, and can affect their perceived trustworthiness in the eyes of business finance lenders. The IVA is recorded on the Individual Insolvency Register and remains on your credit file for six years from the date it was approved.

Critical — if you are in an active IVA, read this first

During an active IVA, you are legally required to notify your insolvency practitioner before taking on any new credit above £500. Failing to do so constitutes a breach of your IVA terms and could cause the arrangement to fail — with potentially serious consequences including bankruptcy proceedings. You must speak to your IP before submitting any finance application. We will ask you to confirm this before we make any introduction.

Active IVA vs discharged IVA — your finance options

Active IVA

Must obtain IP consent before any new credit over £500. Traditional unsecured loans almost impossible to access. Invoice finance possible — not classed as credit in the same way. Asset finance may be possible with IP consent. Merchant cash advance possible — asset-led, no personal credit check in most cases. Strict disclosure obligations to IP throughout.

Discharged IVA

No restrictions on applying for finance — IVA terms ended. Specialist lenders consider discharged IVA applicants. Options improve significantly after 12 months post-discharge. Invoice finance, asset finance and MCA all accessible. Unsecured loans available from specialist lenders. Secured loans using property equity widely available. IVA remains on credit file until the 6-year mark from approval date.

Finance options during an active IVA

Invoice finance

Invoice factoring and discounting facilities are often accessible during an active IVA for B2B businesses. The finance is structured as a purchase of invoices rather than a loan — meaning it is treated differently by many IVA supervisors. The debtor book quality is the primary assessment factor. Disclosure to your IP is still essential.

Asset finance

Asset finance for essential business equipment — vehicles, machinery, technology — may be possible with IP consent. The asset itself is the security, which makes this more acceptable than unsecured borrowing. The IP will need to be satisfied that the finance is necessary for the business.

Merchant cash advance

For businesses that take card payments, a merchant cash advance may be accessible as it is structured as a purchase of future revenue rather than a loan. Some IVA supervisors will accept this — others will not. IP consent is essential and the terms must be fully disclosed.

Finance options after a discharged IVA

0–12 months post-discharge: Specialist lenders only — invoice finance, asset finance and MCAs are the most accessible products. Some specialist unsecured lenders will consider applications with strong trading history.

12–36 months post-discharge: A broader range of specialist lenders will consider applications. Unsecured business loans become accessible for businesses with demonstrable turnover. Property finance — bridging, BTL, commercial mortgages — becomes more accessible.

36–72 months post-discharge: The full range of specialist business finance is accessible and some mainstream lenders may consider applications — particularly for asset-backed or property-secured facilities.

72 months — IVA removed: Six years after the IVA was approved, it is automatically removed from the Individual Insolvency Register and credit file. Applications are then assessed on current position only.

The IP consent requirement — what you need to know

If you are in an active IVA, your insolvency practitioner is not just an adviser — they are a supervisor with legal obligations and powers. Taking on new credit above £500 without their consent is a breach of your IVA terms. This is not a technicality — it can result in your IVA being terminated and your creditors pursuing other recovery options including petitioning for your bankruptcy.

When we receive an enquiry from someone in an active IVA, we always ask them to confirm that their IP is aware of and has consented to the finance enquiry before we make any introduction to a lender.

Frequently Asked Questions

IVA Business Finance

An IVA is a formal, legally binding agreement between an individual and their creditors to repay a portion of their debts over a fixed period — typically five to six years. It is administered by a licensed insolvency practitioner. The IVA is recorded on the Individual Insolvency Register and remains on your credit file for six years from the date it was approved.

Yes, though with significant restrictions. During an active IVA you typically cannot take on new credit above £500 without the consent of your insolvency practitioner. Invoice finance, asset finance and merchant cash advances may be accessible as they are structured differently from traditional credit. You must always inform your insolvency practitioner before applying.

Yes. Once an IVA is completed and discharged, you are free to apply for finance without the restrictions that applied during the arrangement. The IVA remains on your credit file for six years but many specialist lenders consider applications from directors with a discharged IVA — particularly where the IVA has been completed for 12 months or more.

Yes — absolutely. During an active IVA, you are legally required to notify your insolvency practitioner before taking on any new credit above £500. Failing to do so could constitute a breach of your IVA terms, which could lead to the IVA failing. Always speak to your IP first.

An IVA remains on the Individual Insolvency Register and credit file for six years from the date it was approved — regardless of whether it has been completed early. After six years it is removed automatically. The impact on your credit profile reduces significantly over time.

Yes. Specialist property lenders will consider applications from directors with discharged IVAs, particularly those discharged over 12 months ago. The property itself provides security that significantly offsets the credit concern.