Do I Have To Repay My Bounce Back Loans?

Do I Have To Repay My Bounce Back Loans?

The Bounce Back Loan Scheme: an update

Bounce Back Loan Scheme (BBLS): Your FAQs Answered

Do I need to repay my Bounce Back Loans or can I dissolve my UK limited company?

What are my options if I can't pay back my Bounce Back Loan?

What are Bounce Back Loans and what is the Bounce Back Loan Scheme?

The Bounce Back Loan scheme was announced by the government on 12 March 2020.

How do I get a Bounce Back Loan?

Currently, bounce back loans are no longer available, however some lenders may allow you to refinance and pay off your CBILs and other Covid loans.

Do directors have any liability when the company cannot repay its Bounce Back Loans?

All of the UK Government's Bounce Back Loan scheme were underwritten by the Government, this means that if you are a Director of a company that took out a loan under the bounce loan scheme then if you are unable to repay the bounce back loan then you are not personally liable.

When can a Ltd Company director be held personally responsible for repayment of bounce back loans?

As a company director you are not normally responsible for the repayment of the CBIL, Bounce Back Loan and Future Fund Schemes loans unless either:

  • You deliberately took out CBIL, Bounce Back Loan and Future Fund Schemes loans in order to NOT repay them

  • You tried to dissolve your UK limited company when it still had outstanding CBILs and loans or outstanding creditors

  • Your creditors have made a formal complaint that you dissolved your UK limited company to avoid repayment of CBIL, Bounce Back Loan and Future Fund Schemes or any other debts to creditors

Read More on this subject here

How much money can a director be held personally responsible for?

If you are found to be liable for non repayment of business interruption loan scheme funding then there is no upper liability on you or your fellow directors. Creditors, including your lenders, HMRC, or trade creditors may be able to sue you for their losses.

This could leave you open to personal liability that is open ended, meaning you could lose your family home, any other businesses or assets.

What are examples of funds that can be used to repay Bounce Back Loans?

Anyone can use their personal funds or even funds from another source to repay bounce back loans at any time.

If a company cannot afford to repay the Bounce Back Loan, what happens to the directors' salaries?

Directors' salaries are not connected to the ability to repay the bounce back loans.

Why are banks to get tougher on bounce back loan defaulters?

Banks are getting tougher on those who don't repay because despite the UK Government backing the business interruption loan scheme funds, the banks have been told to chase any defaults and possible Bounce Back Loan fraud, presumably because the Government simply does not have the resources to chase every borrower who puts up their hands and says 'Help! I Can't Repay My Bounce Back Loan!'

What happens if I get sued?

If you get sued you may be liable for ALL the debts of the business, plus any damages, fines etc that the court may see fit to impose on you as a Director.

Alternative to Insolvency

There is a fast, simple low cost alternative to insolvency. Click here for more info

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