Bounce Back Loan
Bounce Back Loan Help
If you are a Director of a Limited Company and have obtained a Bounce Back Loan, you might be concerned about the consequences of being unable to repay it. Failing to meet your Bounce Back Loan repayment obligations can result in severe repercussions for both you and your Limited Company. However, there are various alternatives accessible to assist you in handling your loan repayments and avoiding potential legal consequences.
At Company Helpline, we understand the challenges involved in managing your business finances during difficult times. That is why we provide personalized debt guidance to assist you in navigating the repayment of your Bounce Back Loan and exploring strategies for handling your debt responsibilities.
What will happen if I genuinely can’t repay my Bounce Back Loan?
If you’re struggling to make your Bounce Back Loan repayments due to financial difficulties, you may be eligible for a repayment holiday or extension. The Pay As You Grow (PAYG) Scheme is available to those who took our the Bounce Back Loan, allowing them to:
- Extend the loan term from 6 years to 10 years at the same interest rate of 2.5%
- Paying interest only for 6 months (available up to 3 times during the loan term)
- Take a payment holiday for six months (available once during the loan term)
If you haven’t yet used your PAYG options, we recommend contacting your bank to explore these possibilities. However, if you’re unsure about how these options may impact your business or you have already exhausted your PAYG options, speak to our team today. We can provide guidance on alternative solutions that may better suit your circumstances.
Can I write off my Bounce Back Loan?
We can assess all your potential options and provide valuable insights to help you effectively manage the repayment or liquidation process. We can also check if there would be any personal implications ahead of the Liquidation option. Get in touch today.
Closing a limited company with a Bounce Back Loan?
You cannot strike off a company with a Bounce Back Loan. However, you can close the business with a Bounce Back Loan if the business goes into insolvency and you need to enter a formal liquidation process.
You can go into the process of insolvency if:
- A creditor forces you into liquidation, but this is a long process, including a court case.
- Directors push through the liquidation of the company themselves. This is known as a Creditors Voluntary Liquidation (CVL).
A licensed insolvency practitioner will go through the entire process. This means that they will identify company assets, sell off those assets for the benefit of creditors, and they will organise the whole procedure on your behalf.
The result of the liquidation is that the company will no longer exist as a legal operator, and any debt remaining from this point forward will be written off unless it has previously been secured with a personal guarantee. A Bounce Back Loan is included in this.
Can a director be made personally liable for a Bounce Back Loan?
A director can be made personally liable if payments are made in terms of preference as opposed to necessity. What this means is that payments were made to certain creditors while others were ignored. Using the loan to pay off certain creditors whilst simultaneously ignoring others.
A director might have also misused the bounce back loan. If the administrator or liquidator comes to analyse the situation, they could make you personally liable for that situation. Essentially, it is important that you are willing to follow the rules of the agreement when it is signed.
If you follow the agreement in good faith and knowledge, you are not likely to be left personally liable for any of the debts that come your way.
Whether you have questions about debt consolidation, restructuring options, or simply need someone to talk to about your situation, our team of experienced professionals are ready to assist you. Don’t let the weight of debt hold your business back. Get in touch with us today and take the first step towards a brighter financial future. Your call or message is important to us, and we’ll work together to find the best solutions tailored to your specific needs.