How lenders assess an IVA on a director
An IVA is a formal insolvency arrangement between an individual and their creditors. It is listed on the Insolvency Register and appears on the director's personal credit file for the duration of the IVA plus one year after completion. Most IVAs last five or six years.
Lenders are most concerned about IVAs where the director in question is also a significant shareholder or the sole guarantor of the business's borrowing. In those cases, the IVA signals that the individual managing the business has already demonstrated difficulty managing significant personal debt, and their capacity to support a personal guarantee is severely limited.
Finance options available
Business lending secured against company assets rather than personal guarantees is often accessible regardless of director IVA status. Invoice finance providers, for example, primarily assess the quality of your sales ledger and your customers' creditworthiness. Asset finance lenders focus on the asset being funded.
Where a personal guarantee is required, a co-director or shareholder without insolvency history may be able to provide it instead. Lenders will also consider whether the company itself has sufficient balance sheet strength to reduce reliance on personal guarantees.
- Asset-backed and invoice finance products are typically available
- Personal guarantees from a director in an IVA carry no weight for lenders
- A co-director with clean personal credit can provide the guarantee instead
- Discharged IVAs (completed and marked satisfied) are viewed much more favourably
- The reason for the IVA (e.g., pandemic-related vs. history of poor financial management) may be relevant context
Frequently Asked Questions
Is an IVA the same as bankruptcy?
No. An IVA is a voluntary arrangement where the individual agrees to repay a proportion of their debts over 5 to 6 years under the supervision of an insolvency practitioner. Bankruptcy is a court order. An IVA is generally considered less severe than bankruptcy, but both appear on the Insolvency Register and affect personal credit.
Does a director's IVA appear on a company credit report?
Not directly. The IVA is on the director's personal credit file and on the Insolvency Register, which lenders search separately. It will not show on the company's Experian or Creditsafe report, but lenders conducting personal checks on directors will find it.
Can I get a business loan if my IVA was completed years ago?
A completed IVA remains on the Insolvency Register for 3 months after completion and on your personal credit file for 6 years from the start date. Once removed from both, lenders will typically not be aware of the historical IVA unless you disclose it. After 6 years, access to business finance is generally restored.