I cant repay my bounce back loan Advice for directors

 

 

 

Video Script

If you are unable to repay your company’s Bounce Back Loan, you may be concerned about the ramifications for yourself and your company. The Bounce Back Loan Scheme (BBLS) offered businesses emergency funding during the coronavirus pandemic, but many companies continue to suffer financial distress.

Take Our Free 60 Second Test

Get an instant understanding of your:

• Debt and Asset Position
• Formal Insolvency Options
• Next steps

Plus much more ...

Start The 60 Second Test

This video explains the potential outcomes when you can’t repay your Bounce Back Loan, and the options in this situation.

The Bounce Back Loan Scheme benefited businesses in various ways, including a low fixed interest rate of 2.5 per cent. The loan term can now be extended from six years to 10 years under the Pay As You Grow initiative, which also offers other flexible repayment options. These include interest-only payments for six months, and a six-month repayment holiday.

60 Second Test Find Your Nearest Office

This video also explains other options that may be available to you if you can’t repay your Bounce Back Loan. One such option could be restructuring debts within a formal instalment plan called a Company Voluntary Arrangement (CVA). This requires the company to be viable for the long-term.

Another potential solution is to refinance other non-BBLS borrowing under more favourable terms. If the company is in arrears with HMRC, a Time to Pay (TTP) arrangement may also be possible.

Should the business be beyond rescue, however, a procedure called Creditors’ Voluntary Liquidation (CVL) enables you to prioritise creditor interests and fulfil your legal duties as the director of an insolvent company.

The Bounce Back Loan Scheme required no personal guarantees but director liability may be a concern if you have provided a personal guarantee for other company borrowing and your business is insolvent.