Consequences Of Not Repaying BBL

Consequences of not repaying BBL. Written by John A Waller. Consultant. Reviewed May 28th,2024.

I Can’t Pay My Coronavirus Bounce Back Loan

UK Company directors remain concerned about the overall effects of the Coronavirus COVID-19 pandemic. Since February 2022, the continuing events have affected many UK businesses along with the UKRAINE war and an unstable economy haunted by rampant inflation..

The Bounce Back Loan Scheme has now ceased However, many UK companies therfore remain in financial difficulty.

Let’s say you have concerns about the viability of your company. You should be therefore aware of the options for company directors in difficulty.

The UK government’s efforts to support businesses.

Despite the UK government’s attempts to minimise the coronavirus’ economic damage through support loans, many directors are concerned about their companies’ ability to continue repaying their BBLS or CBILS.

What happens if my company remains unable to repay CBILS or BB?

Not being able to repay a bounce back or coronavirus business interruption loan means the default reverts to the loan terms. Both loans require the borrower to make monthly repayments, but if the borrower finds it impossible to pay, any part of the unpaid loan is unsecured.

UK government back loans, such as CBILS and BBLS, require no personal guarantee. However, lenders executed personal guarantees on their loans. 

A borrower signing a guarantee personally commits the signatory to repay the lender party or all the amount lent. Notably, the failure of a company to repay a loan may ‘crystallise’ the guarantee, allowing the lender to pursue the guarantor for recovery of the monies owed.

So, should the company therefore remain no longer able to repay the loans? Then, those who signed a personal guarantee remain at risk, as the company’s limited liability ring fence withdraws, therefore exposing guarantors to liability.

“Your lender will advise of any guarantee they hold from you.”

Why should I deal with not repaying my Bounce Back Loan?

We are currently being approached by directors who do not understand the implications of directors trading while insolvent.

As a responsible director, you should minimise any losses you may incur from your actions. At the same time, you are understanding your director’s duties and responsibilities.

Debt does not go away. However, correctly managed. Directors can move on, relieving all the stress associated with such action.

So act today. Contact John Waller at HBG Advisory on the number detailed above.

Consequences of not repaying BBL. Can they be written off?

The UK government, acting as a guarantor for bounce-back loans, means no personal guarantees were required. However, writing the loan off is not an option unless the company (the borrower) enters liquidation. A formal liquidation prompts the government to repay the outstanding balance to the lender.

Consequences of not repaying BBL – available solutions?

Failing to repay your UK Government back loans allows borrowers to apply for further support by further debt relief options.

However, the operation of a financially struggling business during the pandemic is now potentially exacerbated by the UKRANIAN crisis. If so, please talk to an insolvency expert at HBG Advisory.

So as licensed Insolvency Practitioners and Members of the Turnaround Association, we are here to help you over this period.

Help for limited companies

If you start to experience problems repaying your bounce back loan? Then the unpaid amount becomes an unsecured debt. Limited companies have numerous options to alleviate this:

  • Manageable monthly payments

    • Having a viable business. Once a debt has been sorted out. Directors can then consider a repayment arrangement and repay creditors over an agreed period (usually 60 months). Commonly referred to as a Company Voluntary Arrangements (CVA). Once approved, a CVA repays unsecured creditors, including bounce back loans, enabling seamless trading.
  • Appointing a third party to take control of the company.

    • Should your company require major restructuring, directors may consider a company administration. However, be aware. The appointed administrator assumes control over the company so they can sell it.
  • Closure of the limited company

Pay as You Go Scheme

      • The Pay As You Grow measures are designed for people who have already borrowed money from the Bounce Back Loan Scheme. and need extra time to pay.

They provide options to borrowers struggling such as:-

  • extend the duration of your bounce back loan from six years to 10 years.
  • For the first six months, you have the option of only paying the interest on the loan, and you can do this up to three times during the life of the loan.
  • request a six-month period where you don’t have to make any repayments.

You can choose to use just one of these options, or several of them in combination, depending on what you need.

If you want to, you can also fully repay your loan early, without any penalties for doing so.

Furthermore, if you were to take 18 months to repay the loan, you would only be paying back the interest and none of the original amount you borrowed (known as the principal).

Consequences of not repaying BBL as a sole trader

    • Sole trader businesses did not have the option to apply for Coronavirus Business Interruption Loans (CBILS). However, they could apply for Bounce Back Loans (BBL).

Individual Voluntary Arrangements (IVA) are available for sole traders should they have diifulty, repaying loans.

Bounce Back Loan advice for Company Directors

Directors should seek professional advice if they have Bounce Back Loan worries regarding repayments. The UK government introduced the COVID-19 support scheme to support businesses through the pandemic. However, repaying the loans has been difficult. So ensure you seek advice sooner than later.
Book a Virtual Meeting - Free Confidential Advice
If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448..
Association of Chartered Certified Accountants



IPA Logo
TMA Logo
R3 Logo
Business Recovery & Rescue.
Liquidation Specialists.
Experts in dealing with Company Debt

    Get Help Today

    1. Name: (*)

    2. Company Name:

    3. Telephone: (*)

    4. Email:

    5. Message:

    *Required Fields


    0330 056 3120