Bounce Back Loan – Help 2023-04-27T09:07:00+01:00

Bounce Back Loan – Help

My Company Cannot Afford To Pay Back It’s Bounce Back Loan

When the pandemic started, the government quickly introduced Bounce Back Loans to help companies get through the difficulties until a time they were back on their feet.  The take-up was massive, but not all Bounce Back Loans have resulted in a successful continuation of a business.  The lenders were not allowed to take security or personal guarantees, and in the event of non-payment, the government has agreed to reimburse the lender.

For some companies, the additional burden of Bounce Back Loan repayments will be enough to push them into insolvency, especially if there has been no recovery of trade to keep the company going.

Providing the Bounce Back Loan money has been used in the ordinary course of business and to help the company during its recent difficulties, then, if the company had to go into Liquidation, there would be no come back against the directors.

Here, at Company Advice, we always check how Bounce Back Loan money has been used, in order that we can offer some insight as to the likelihood of what may happen if the company goes into Liquidation.

Our discussions are always fair and honest, with the intention of giving the director of a limited company, some comfort that the way forward he/she is choosing is the right one.

Can I Liquidate My Company If I Have A Bounce Back Loan?

The quick answer is yes, and generally, companies go into Voluntary Liquidation if they are insolvent.  You should be aware that a Liquidator will look to see how the Bounce Back Loan has been used and providing there is nothing out of the ordinary, everything should be ok.  If it is discovered that the directors have used the Bounce Back Loan personally, and not for company debts, or to support the business, then the Liquidator will want to come to some level of affordable repayment arrangement.

Here at Company Advice, we always talk to directors about how Bounce Back Loan monies have been used, in order that no one is falling into any traps they may be unaware of.

Can I Dissolve My Company If I Have Had A Bounce Back Loan?

You can dissolve your company if the Bounce Back Loan has been repaid in full, however, if you try to dissolve a company via form DS01, it is likely that this will be objected to by the Bounce Back Loan lender.
It is an offence to try and dissolve a company that knowingly has debts, unless formal agreement has been reached that these debts are written off.
Here at Company Advice, we assist all types of companies that have tried the route of dissolution and been unsuccessful.  There are various alternatives that are open to company directors in this position, and if you require any further information, or wish to discuss your company on a confidential basis, please contact us as soon as possible.

Directors Disqualification and Non-Payment of Bounce Back Loans

Here at Company Advice, we are often asked by directors “Will I be disqualified, if I’ve had a Bounce Back Loan and it has not been repaid?”.  The answer can vary depending on what the Bounce Back Loan has been used for, and whether the company has other debts that may mean the Liquidator needs to do further investigation.  Every case is unique and generally, providing Bounce Back Loan money has been used properly in the business, there should be little to worry about.
If you have a question about Bounce Back Loans, please contact Company Advice, on a confidential basis, and we will do our best to give you our view of what the situation would be in your circumstances, to help and assist you to go forward.
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