What happens if I cannot repay my Bounce Back Loan?

As a director of a company that cannot pay its Bounce Back Loan your lending bank may be able to help by spreading out your repayments over a longer period or perhaps give you a short payment holiday to give you some breaking space to allow you more time to pay.

Advice for limited companies that cannot afford their Bounce Back Loans ('BBLs')

In the wake of the Covid-19 pandemic the UK government introduced a range of support measures to help support limited companies through a prolonged and unprecedented period of business interruption.

Bounce Back Loans were one of the support measures introduced back in March 20220 and were available to all UK limited companies.  Loans of up to £50,000 were fully backed by the government and no personal guarantees had to be given.  Additionally, no payments towards these loans were required for the first twelve months with the government also covering the interest during this time.

Whilst BBLs were a life line to businesses during the height of the pandemic many companies are now facing with having to make payments towards these loans even if their businesses have not fully recovered from the disruption or returned to pre-pandemic levels of trading.

So what are your options if you can't pay your Bounce Back Loan?

Firstly, don't worry - there are thousands of company directors in the same position.  Some of the options available to you could include:

• Talking to your lender about the Pay As You Grow (PAYG) Bounce Back Loan Scheme - this was introduced to make it easier for companies having difficulties repaying their BBLs by allowing them to defer repayments for a further six months to extend the length of the Bounce Back Loan.
• Setting up a Time to Pay (TTP) arrangement if you owe money to HMRC - which allows you to repay your tax arrears over a period of up to 36 months.  We could help you open up negotiations and facilitate this.
• Assessing whether your company's insolvent and if there is no likelihood of being able to turn the situation around provide you with the support you need to close down the business.

Above are just some of the possible options available.  However, it is vital you seek expert help and advice as soon as possible.  The sooner you take action the more otiosn will be available to you and the business.  Whatever your situation speak to a member of our expert team for advice and support.  Our initial consultation is always free and confidential.

Call our team today on 0800 331 7417