Bounce Back Loan Support

Bounce Back Loan Support

Bounce Back Loan Support written by John A Waller. Consultant. Updated May 29th,2024.

Boune Back Loan Support (UK Gov Financial Support) remained available through accredited lenders and partners throughout the UK.

BBLs financially supported businesses across the UK including:

  • Helping those unable to qualify for coronavirus business interruption loans cbils.
  • They were losing revenue and seeing their cash flow disrupted due to the COVID-19 pandemic.
  • Could benefit from £50,000 or less in finance.
  • Lenders provided a six-yea loan term offering from £2,000 up to 25% of a business’s turnover. The maximum BBL total amount stood at £50,000. (Requiring a £200,000 annual turnover to claim £50,000.).

The scheme provided the lender with a full guarantee against the outstanding balance of the facility.

However, the borrower remained liable for payment. However, if they went into insolvent liquidation, the BBL would be written and the options would not affect your credit rating.

The Bounce Back Loan support scheme closed however, to new applications 31st March,2021.

Issues with Bounce Back Loans

A critical condition for taking out a BBL however, is that all applications contain a clause asking directors to confirm whether the business existed already in difficulty on December 31st, 2019.

In May 2020, the UK Government launched the Bounce Back Loan support scheme, enabling UK small and medium sized businesses to have emergency access to funding during the first wave of the COVID-19 pandemic. The UK Government lent over £45 billion to UK companies with BBL support. However, it now requires repaying.

While BBLs acted as a lifeline for many companies at the height of the COVID-19 pandemic, they exist now increasingly seen as a source of financial frustration, as repayments add yet another monthly outgoing to already stretched cash flows.

So if you experience hardship repaying your Bounce Back Loan support, you stand not alone. As the UK Government grows concerned, how many companies struggle or cannot repay?

Legislation in parliament by the UK Treasury remains now in place to enable inquiries into companies that managed to strike off their company with an unpaid BBL.

So, seek Bounce Back Loan support and expert help and advice if you believe you will have problems keeping up with your Bounce Back Loan repayments. HBG Advisory is here to help you comprehend the options available, along with how to move forward.

Remember, when you took out the BBL, you were not required to give any personal guarantees.

Repayment of our Bounce Back Loan 

You have had a payment holiday for the first 12 months with interest paid by the UK government through a business interruption payment. After the first 12 months, you will have to make monthly repayments plus interest from the end of your repayment holiday. 

Lenders automatically collect repayments using the payment details set up when opening your BBL. 

Options if you are unable to pay back your BBL

If you remain in a troubling financial position, and unable to repay your BBL? Then it is vital that you seek expert help and advice urgently. May it be possible to reschedule the terms of the BBL?

For help and exploring options if unable to repay your BBL. Contact John Waller at HBG Advisory on 0800 612 5448.

Is it possible to liquidate my limited company if I have Bounce Back Loan 

Can I liquidate with a Bounce Back Loan?

Yes, you can still liquidate your limited company.

Liquidation and Bounce back loans stand classified as “unsecured debt” in insolvency. Therefore, the financial provider must wait to be paid by the licensed insolvency practitioner, the appointed liquidator.

So contact HBG Advisory for immediate Bounce Back Loan support on 0800 612 5448.

BBLs and Personal liability

It is essential to understand whether you could face personal liability for the remainder of your BBL if your company does not maintain payment.

Liquidating your company and failing to repay your BBLl don t affect your credit score

Paying Tax with your BBL 

The Bounce Back Loan scheme (BBLS) was created to aid businesses during the COVID-19 pandemic. However, company directors had the discretion to use the money in whatever way would help their company survive. For some, this was paying rent and overheads; for others, it remained keeping up to date with their tax obligations. There exists rules surrounding misuse of BBL funds, and it is crucial that you understand their purpose.

Write off BBL 

Many concerned directors ask, Can you write off  a Bounce Back Loan if  the company cannot repay?”

No! However it is insolvent you may liquidate the company and subject to the BBL not being claimed incorrectly. The liquidator writes to the lender who then claims direct from the UK government. Therefore being the only way the bbl will be written off.

BBL Support and Banks

Understand the options your bank will give you to extend, top-up, or obtain a payment holiday.

Bounce Back Loans and extending your repayment period 

You now may extend the repayment term of your BBL, allowing you to repay the money borrowed over ten years rather than six. However, when considering extending your Bounce Back Loan support, evaluate the pros and cons of the financial implications.

The magnitude of potential losses prompted the government to ensure recovery, as they act as guarantors in the event of failure to repay. Therefore, UK banks take a hard line with companies attempting to strike off their company with an outstanding BBL.

With options for closing a company with an outstanding BBL reduced, it has never been more essential to take expert help and advice when winding up your business.

Pay As You Grow Scheme

The introduction of the ‘Pay As You Grow’ scheme helps borrowers who may experience financial difficulties in the future by providing them with more flexible repayment options. If a borrower uses Pay as You Grow, it will not have any negative consequences for their credit rating, but it may be factored into future creditworthiness assessments by lenders.

The PAYG scheme enabled borrowers to: –

  • request an  extension to 10 years from six years, the amount of interest you pay is 2.5%.
  • reduce their monthly repayments by paying interest only for six months. This option can be used up to three times during the term of the BBL
  • take a six-month repayment holiday. This is a one-time option during the term of your Bounce Back Loan support.

Borrowers should wait to be contacted by their lender about PAYG before enquiring.

Bounce Back Loan Support for Directors

Company directors should seek professional advice if they have BBL worries regarding repayments. The UK government introduced the COVID-19 support scheme to support businesses through the pandemic.

However, repaying the BBLs continues to be difficult. So ensure you seek advice sooner than later.

Call the team at HBG Advisory today on 0330 056 3120 for robust prompt support and guidance with your BBL.

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