Are you feeling overwhelmed by the challenges of managing your Bounce Back Loan amidst uncertain economic times? Navigating financial support can be daunting, especially when you’re facing uncertainties about repayment and financial stability. If you’re seeking reliable Bounce Back Loan help and guidance, look no further. 

We offer a comprehensive guide with clear information to help you understand your options and make informed decisions about your Bounce Back Loan. This guide can help you navigate the complexities of the scheme and choose the best course of action for your business.

For further assistance, you can also reach out to professional insolvency practitioners from Vanguard Insolvency. They can provide tailored advice and support specific to your situation.

Bounce Back Loan is a debt!

It’s important to bear in mind that the Bounce Back Loan Scheme is a debt, and repaying the loan is a must.  Borrowers should make sure they can handle repayments before taking out the loan and should talk to their lender if they face financial difficulties. Lenders must offer support to borrowers struggling with repayments, with various options like payment holidays and loan restructuring. 

The Bounce Back Loan Scheme has been a crucial lifeline for many small businesses during the COVID-19 pandemic. If you find it challenging to meet the repayment for your Bounce Back Loan, there’s no need to worry about being fraudulent. Instead, you have various options available to gradually repay the loan.

I Can’t Afford to Repay my Bounce Back Loan – What are my Options?

If your company can’t manage to pay its Bounce Back Loan, you can ask your lender to spread the payments over a longer time to ease the burden, take a short break from payments, or think about closing the company through insolvent liquidation. 

If you find yourself unable to repay a Bounce Back Loan, it could mean you’ve entered insolvency, so it’s essential to seek professional advice right away. Here are the options open to you:

1. Contact your lender:

If you’re struggling to repay your Bounce Back Loan, the first step is to get in touch with your lender. Explain your current financial situation and difficulties. Lenders understand that unexpected challenges can arise, and they may be willing to work with you to find a solution. 

They might offer a repayment plan that suits your circumstances or provide alternative forms of assistance. Communication is key, so don’t hesitate to reach out and discuss your challenges openly.

2. Take advantage of the Pay As You Grow scheme:

The Pay As You Grow scheme is designed to provide flexibility for businesses facing repayment challenges. Through this scheme, you have the option to extend the term of your Bounce Back Loan from the standard 6 years to 10 years. 

This extension can help reduce the monthly repayment amount, making it more manageable for your business. Alternatively, you may choose to pay interest only for a period of up to 6 months, offering temporary relief. It’s crucial to understand the implications of these options and how they align with your financial situation.

3. Consider a formal insolvency procedure:

If your company is in a situation where it cannot meet its financial obligations, a formal insolvency procedure may be necessary. Two common options are the Creditors Voluntary Liquidation (CVL) and Administration.

  • Creditors Voluntary Liquidation (CVL): In this process, the company’s assets are liquidated, and the proceeds are used to repay creditors. This is initiated voluntarily by the company’s directors, acknowledging the inability to pay debts.
  • Administration: This is a procedure that involves the appointment of an administrator to manage the company’s affairs, to rescue it as a going concern or to maximise creditor returns. It provides a breathing space from creditor action while a plan is formulated.

Can My Bounce Back Loan be written off?

Can My Bounce Back Loan be written off

When it comes to Bounce Back Loans, the possibility of having your loan written off largely depends on your circumstances and the available options for debt relief. 

While Bounce Back Loans were introduced to provide financial support to businesses during challenging times, there are situations where repayment becomes unfeasible.

If your business is facing severe financial difficulties and is unable to repay the Bounce Back Loan, you may explore options such as insolvency or debt restructuring. 

In some cases, if your business enters into insolvency procedures like liquidation or administration, there might be provisions for writing off debts, including Bounce Back Loans, as part of the resolution process.

However, it’s important to note that the decision to write off a Bounce Back Loan is subject to various factors and legal considerations. Insolvency procedures involve thorough assessments of your financial situation, creditor agreements, and compliance with legal requirements.

Seeking professional advice from insolvency practitioners or financial advisors is crucial in understanding your options and navigating the complexities of debt relief. 

Can I negotiate a Bounce Back Loan on repayment terms?

Absolutely! When it comes to your Bounce Back Loan, negotiating repayment terms is within your reach, especially if you’re facing financial hurdles. For instance, 

  • Take the initiative to speak with your lender about potential options like extending the repayment period, reducing monthly payments, or requesting a temporary payment break. 
  • Back up your request with evidence of your financial situation and show your dedication to meeting your responsibilities. 
  • Many lenders understand the challenges businesses encounter and may be open to finding flexible solutions to help you manage repayments better. 

Can directors be held personally liable for a BBL?

Directors can be held personally liable for a Bounce Back Loan (BBL) if they engage in fraudulent activity or breach their fiduciary duties.

However, under normal circumstances, BBLs are provided without personal guarantees, shielding directors from personal liability. The loans are intended to support businesses during challenging times, and the responsibility for repayment typically rests with the business entity itself. 

As long as directors act in good faith and fulfill their legal obligations, they are not usually personally liable for the BBL. It’s crucial for directors to adhere to legal and ethical standards to avoid personal liability issues.

Rescuing a Company That Cannot Pay Its Bounce Back Loan

If your company is struggling to pay back its Bounce Back Loan, closing down isn’t the only choice. Here, we highlight ways you could rescue the company.

1. Going for the TTP Route

A TTP arrangement is a flexible agreement between a business and HMRC, designed to repay tax debts over a longer period, usually up to 12 months. This plan provides relief from immediate payments for VAT, Corporation Tax, Income Tax, and National Insurance contributions. 

Although it won’t directly help with the Bounce back loan, it might free up cash from other areas that you can use for repayments.

To qualify for a TTP arrangement, your business needs to show financial viability and present a credible plan for repaying the debt. HMRC carefully reviews each application, looking at the company’s financial history, current financial situation, and future prospects.

2. Understanding Company Voluntary Arrangements

A CVA is a legally binding agreement between a company and its creditors, allowing debt repayment over a manageable period, usually up to five years. CVAs offer flexibility, allowing for debt reduction, extended repayment terms, or even debt write-offs.

To go for a CVA, your company must be either insolvent or close to it. Additionally, you need a convincing plan for repaying the debt, showing that the CVA benefits all creditors.

How Vanguard Insolvency Can Help With Your Bounce Back Loan Debt! 

As Vanguard Insolvency, we are dedicated to providing comprehensive support and guidance to individuals and businesses facing financial challenges, including those related to Bounce Back Loans. Here’s how we can assist you with your Bounce Back Loan:

1. Financial Assessment and Analysis: 

At Vanguard Insolvency, we conduct a thorough financial assessment and analysis of your current situation. We evaluate your income, expenses, assets, and liabilities to understand the impact of Bounce Back Loans on your financial health and determine the best course of action.

2. Debt Management Solutions: 

We offer tailored debt management solutions to help you address your Bounce Back Loan obligations effectively. Our team negotiates with creditors on your behalf to establish manageable repayment plans, reduce interest rates, and explore debt consolidation options to alleviate financial strain.

3. Insolvency Advice and Support: 

If you are struggling to repay your Bounce Back Loan and facing insolvency, we provide expert advice and support throughout the insolvency process. Feel free to contact us at 0121 769 1915 or via email at to schedule a confidential consultation. 

As your advocate, we facilitate open communication and negotiate with creditors to reach fair agreements on debt repayment terms. Our goal is to achieve mutually beneficial outcomes while representing your interests and preserving your financial well-being!

Frequently Asked Questions

1. What happens to the bounce back loan if I liquidate my company?

The Bounce Back Loan is an unsecured debt. Unsecured debts in the liquidation process are typically discharged, unless there are personal implications arising from Bounce Back Loan fraud or misuse.

2. Can I close my business with a Bounce Back Loan?

A business can be closed with bounce back loan. But this comes with legal and financial ramifications. Engaging in a formal liquidation procedure may be necessary, and directors may find themselves potentially accountable for the debt.

3. Can I use a Bounce Back Loan to invest in another business venture?

The Bounce Back Loan scheme is designed to support businesses during challenging times, not for investment in new ventures. Using the loan for purposes other than those outlined in the scheme terms may result in legal consequences and repayment obligations.

4. What happens if I cannot repay my Bounce Back Loan?

If you’re unable to meet your Bounce Back Loan repayments, it’s essential to communicate with your lender immediately. They may offer options such as repayment holidays, re

Senior Partner at Vanguard Insolvency Practitioners | Website | + posts

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.