Bounce Back Loan Help
Worried about Bounce Back Loan repayments? Watch our video and get help now
The Experts in Bounce Back Loan Help
Between May 2020 and June 2021, lenders approved over 1.5m in Bounce Back Loans, totalling £47.36bn. The fast access to funds that the BBLS provided stopped a lot of organisations from going into liquidation during lockdown.
Now that the dust has settled and life for many is getting back to normality, some businesses are struggling to make the repayments on their loans.
The conflict in Ukraine, high energy prices, the rising cost of living and the lowest consumer confidence ratings since 2008 means that some businesses aren’t 'bouncing back' in the way they might have hoped.
Frequently Asked Questions
What was the Bounce Back Loan?
The Bounce Back Loan Scheme was launched in May 2020, following feedback from businesses that the Coronavirus Business Interruption Loan Scheme (CBILS) made it difficult for smaller businesses to access finance.
Bounce Back Loans provided small businesses with fast access to funds between £2,000 and £50,000 - capped at of 25% of their turnover. Businesses did not have to make any repayments for the first 12 months of their loan.
What could the Bounce Back Loan be used for?
There were no detailed rules for how a Bounce Back Loan could be spent, but there were broad guidelines that it should be used for the ‘economic benefit’ of the business and should not be used for personal gain.
Common legitimate uses of the loan included paying company bills, purchasing stock or supplies, and paying staff wages.
What were the terms and conditions of the Bounce Back Loan?
The initial term of the loan was 6 years. The first 12 months were interest free (with no payments due), with interest rates of 2.5% per year applicable after.
Although the loans were 100% backed by the Government, it was made clear that businesses would be responsible for repaying any amount borrowed, plus any interest due.
I'm Struggling to Repay my Loan
The best thing you can do is to speak to someone as soon as you can.
We’ve supported many businesses through similar challenges and can help present your options to you based on your individual circumstances as well as guide you on the most suitable route for yourself and your company.
Get in touch today, and let’s work through this together.
Closing with a Bounce Back Loan
How do I close a limited company with a Bounce Back Loan?
If you’re the Director of a limited company that is unable to repay the Bounce Back Loan, there is only 1 way to close the company – through a Liquidation. There are 2 types – Voluntary and Compulsory.
As a limited company, the debt will lie with that entity, will be written off, and not affect you personally. However, it’s imperative that we understand how it was applied for and what it was spent on to ascertain if there would be any personal implications for you, the Director, by closing.
A Creditors Voluntary Liquidation needs to be carried out by a licensed Insolvency practitioner of which we have a trusted panel – this is to ensure we can introduce you to the most suitable partner and hold your hand throughout the process.
Our guidance is a FREE service to assist you through what can be a very daunting and stressful time. So, before you consider liquidation of your company, please speak to a member of our team.
Can I dissolve my company with an outstanding Bounce Back Loan?
In short NO as the Bank will object to this application. You can only close it through a formal process of liquidation, however its imperative you understand the whole process and the role of the Insolvency practitioner first before engaging them.
The Directors Helpline will assess everything before you decide that this is the right route for you.
Frequently Asked Questions
What happens to the bounce back loan if I liquidate my company?
The Bounce Back Loan is an unsecured debt. Unsecured debts in the liquidation process are generally written off, unless there are personal implications due to Bounce Back Loan fraud or misuse.
I used the loan for more than my business, are HMRC likely to investigate?
HMRC are undertaking checks into the use of Bounce Back Loans and other Covid support schemes, meaning they could investigate your company. It's best to get in touch with us to discuss any potential implications and options.
Am I personably liable if I can't pay my BBLs?
If you’ve received a Bounce Back Loan and close the company through the process of liquidation, part of a liquidator’s duty is to investigate and report on the Directors conduct. This will include reviewing all the bank statements to understand if there is any illegal dividends / Directors loan / misuse of funds etc. They will also look into how the Bounce Back Loan funds were allocated - ensuring that any funds were used for the genuine economic benefit of your business, and not for personal gain. If you are found to have misused the funds from a Bounce Back Loan, there can be serious legal and financial consequences.
So, before you consider liquidation of your company, please speak to a member of our team. As we do all the analysis pre liquidation to ensure it’s the most appropriate route for you to take and assess any risk of unexpected personal implications.
What happens if I’m a sole trader and I can’t repay the Bounce Back Loan?
As a sole trader, if you're struggling with Bounce Back Loan repayments, or unable to pay, it’s still unclear how banks are pursuing sole traders that default on their Bounce Back Loan.
In terms of the best way to approach things, a lot depends on your individual circumstances, and any other debts your business may have. You should speak to our team to assess your situation before considering formal routes such as Individual Voluntary Arrangements (IVAs) or bankruptcy.
"If your business is worried about Bounce Back Loan repayments, it's important to remember you are NOT alone and help is at hand..." Jonathan Cooper, Founder and DirectorGet in Touch
Repayment Help (PAYG)
The Pay As You Grow scheme offers three options to help with repayments. These options were implemented to help businesses struggling to pay back their loans on the original terms and can be used in combination.
- Request an extension to the loan term, from 6 years to 10 years
- Request to pay 'interest only' for a period of six months
- Take a payment holiday for up to 6 months