Bounce Back Loans

If you have any concerns regarding your Bounce Back Loan we offer a service that includes a free initial consultation, expert guidance and support, confidentiality, and a fully licensed practitioner that can offer you the right advice.

What are your options if your company can no longer afford to pay its Bounce Back Loan?

In 2020, the coronavirus crisis caused unprecedented business interruption across the country. As a result, the government introduced a series of measures aimed at keeping companies in business.

One of these initiatives was the government-backed Bounce Back Loan (BBL). This initiative allowed all eligible businesses to obtain an unsecured loan of up to £50,000. Bounce Back Loans became available in March 2020, with no repayments having to be made for the first 12 months.

Some businesses are experiencing problems in making these additional loan repayments. This article sets out the options available to you.

Am I able to reduce my monthly Bounce Back Loan payments?

The Government introduced the Pay as You Grow Scheme (PAYG) which allows a company to ease its cash flow by:-

Taking a six-month payment holiday

This means that you will not pay back your loan payments for six months, but during this time your interest rates will continue to be added onto the loan. Overall, you will end up paying back more, which may result in your monthly payments increasing after your break.

Extending the loan to ten years

By extending your loan between six to ten years, your monthly payments could halve, meaning that this may be a possible solution for you. It’s important to note that with this extension your loan will acquire more interest over time. You will also need to ensure that your business does not cease trading within the extended period.

Make interest only payment for six months

You have the right to use this option up to three times while paying back your Bounce Back Loans. With this in mind, the total amount you’ll pay back will increase.

What Happens if I am Still Struggling to Pay my Bounce Back Loan?

Whilst the PAYG scheme will give some companies the breathing space they need to repay their Bounce Back Loan, for others it is still a struggle. If this is the case then you may need further advice on the options available.

If you have other liabilities that you cannot pay, then you could consider a Company Voluntary Arrangement. A CVA is a legal agreement to pay back your company debts while still trading.

If you do not believe that the company can continue to trade even with the above support, then the company should cease trading and steps should be taken to place the company into Creditor Voluntary Liquidation. This means that your business will be formally dissolved.

It’s worth noting that whilst BBL’s did not have a personal guarantee, directors of companies that took out these loans may have personal liability if the company wasn’t entitled to a loan or directors have personally benefited from the proceeds.

Get help with your Bounce Back Loan from Restart BTi

To get in contact and receive your free consultation, simply fill out the short form below.

enquiries@restartbti.co.uk

Suite 44, Dunston House, Dunston Road, Chesterfield, Derbyshire, S41 9QD

01246 959388

Gareth Graham Self is authorised to act as an insolvency practitioner in the UK by The Insolvency Practitioners Association under office holder number 9706.
Restart BTi is the trading name of Restart Business Turnaround Insolvency Limited, a limited company registered in England and Wales no: 11517419
Registered Office: Suite 42 Dunston House, Dunston Road, Chesterfield S41 9QD
Cookie Policy | Privacy Policy ! Vulnerable Person Policy | Complaints Procedure