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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Voluntary administration (VA)

What is voluntary administration, and what does it mean for a secured lender?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

Voluntary administration is the insolvency procedure in Australia and New Zealand in which an administrator, usually appointed by the company's directors, takes control of a struggling company while a moratorium holds most creditors back. Creditors then vote on whether the company enters a deed of company arrangement, goes back to its directors or is liquidated. A lender with security over all or substantially all of the company's property has a short window to enforce, 13 business days in Australia and 10 working days in New Zealand, after which it is generally bound by the moratorium. The nearest UK procedure is administration.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WHAT IT IS NOT

Receivership is a secured lender appointing a receiver to realise its own security; voluntary administration is usually started by the directors and holds creditors generally, including most secured ones, back while the company's future is decided.

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