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What Directors Need To Know About Bounce Back Loans

A bounce back loan was a loan offered by the government amid the Coronavirus pandemic, to help small businesses gain access to fast track, ‘emergency’ finance, borrowing between £2,000 and £50,000.  Now that we are recovering from the pandemic and the loans are starting to be repaid there are a number of questions that directors are asking.   

However, be clear that if you cannot pay these loans back, or they are unaffordable, then you must act.

Serious questions are being asked by the government and the banks as to whether the money has been spent wisely. Pressure will be applied to directors that have taken money out of the company unreasonably given the loans were designed to help the companies "bounce back".

The banks are only going to get the money back from the government if they can demonstrate that they have done everything in their power to recover the loans, such as legal threats. If that fails, then realistically, only a terminal insolvency event, i.e liquidation, can demostrate to the government that they have tried everything due to the powers of the liquidator/administrator to investigate where the money has gone and the conduct of the directors.  This is why attempts to dissolve companies will not be successful.

See below our guides

Will the Bank Close My Account if I Cannot Pay My Bounce Back Loan or CBILS

Will the Bank Close My Account if I Cannot Pay My Bounce Back Loan or CBILS

Will the Bank Close My Account if I Cannot Pay My Bounce Back Loan or CBILS

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Will My Bank Issue A Winding Up Petition For A Bounce Back Loan

Will My Bank Issue A Winding Up Petition For A Bounce Back Loan

This is a legitimate question to ask.  The moratorium on winding up petitions...

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What if I Can't Pay Back My Coronavirus Business Interruption Loan (CBILS)

What if I Can't Pay Back My Coronavirus Business Interruption Loan (CBILS)

Directors may worry that they may not be able to pay back CBILS loans that have...

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Lloyds Banking Group Closing Companies’ Bank Accounts For Failing To Pay BBLs

Lloyds Banking Group Closing Companies’ Bank Accounts For Failing To Pay BBLs

In quite an extraordinary development, companies are now receiving letters from...

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Personal Liability For Bounce Back Loans

Personal Liability For Bounce Back Loans

Bounce Back Loans were aimed at smaller businesses and directors would not be...

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Can I Liquidate My Company With A Bounce Back Loan?

Can I Liquidate My Company With A Bounce Back Loan?

The short answer is yes you can liquidate your company with a bounceback loan. ...

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Can’t Pay Back Bounce Back Loan

Can’t Pay Back Bounce Back Loan

Bounce back loans are loans that are 100% backed by the government. If you...

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Can I Strike Off A Company With A Bounce Back Loan

Can I Strike Off A Company With A Bounce Back Loan

If you have a bounce back loan which you cannot pay back, you may to tempted to...

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A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? Feel you have got into a bit of a mess? Covid-19?, How to pay wages on pay day? For reassuring advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539

Please note that the guide includes updates due to Covid-19 For instance there have been some changes to insolvency legislation that limits creditors actions.  A new 20 day moratorium for distressed businesses has also been introduced. 

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