The Bounce Back Loan Scheme (BBL) was introduced by the UK government to provide needed financial support to small businesses that are facing cash flow problems. It appeared that the program let businesses get a loan of PS50,000 with no interest and without any repayments during the first year, proved to be an emergency aid for struggling businesses. However, as time been passed, there have been concerns about the repayment of unused Bounce Back Loans. In the end, several companies are in a position that they’re unable to pay their loans. Debt restructuring is a common practice and creditors might contemplate liquidation by voluntary.
It is unclear what will happen to these loans – will creditors and banks expect the business to repay them, or will bounceback loans be taken away by the bank? Many business owners and directors are asking themselves this question when they find themselves in a bind with their overdrawn director loan accounts and personal guarantee. For more information, click bounce back loan
The loophole in the bounce back loophole
Some people speculate that there could be some kind of “loophole that allows bounce-back loans” which would allow businesses to avoid repayment of their loans. This loophole is based on the fact that the BBLs are technically government-guaranteed loans. The government is liable for repayment if the business does not pay.
This is merely an unproven theory. Even if a firm defaults on bounce-back loans, the government isn’t required to forgive them.
What happens if I’m not able to pay back my bounce-back loan?
There are many options for you if you’re unable pay back the bounceback loan.
You could try to restructure your debt. It could mean negotiation with your lender in order to agree to a reduced repayment amount or a longer term for repayment.
You may choose to opt for the voluntary liquidation of creditors. It is a formal procedure that allows businesses to shut down their businesses and repay their creditors.
You could fail to pay the loan. However, this could lead to negative consequences, like an impact on your credit rating and the potential for legal actions.
What’s the most efficient way to handle your bounce-back loan?
It is important that you seek help from a professional if you’re struggling to repay the bounce-back loan. A financial adviser can help you evaluate your options and formulate strategies for managing your debt.
Remember that you’re not alone. It is not a lonely place. The government has put in place several support schemes for businesses who are struggling to repay their bounce-back loans.
If you are struggling with your bounce back loan, don’t be afraid to ask for help. There are a variety of people who can help you get back to normal.
Professionals like Company Doctor are experts at helping businesses through the complicated liquidation process in times of financial hardship. They are specialists in more than the traditional insolvency processes, and are able to give advice on other feasible solutions, like voluntary and debt restructuring. Insolvency experts have the skills and knowledge to assess the financial condition of a business, determine its viability and make the appropriate recommendations. They are able to provide tailored advice and support companies to facilitate a smooth transition during the liquidation process.
Bounce Back Loans’ future is still uncertain, as the ailment continues to impact businesses. As businesses struggle with the repayment of these loans, it’s essential to be cautious and seek out professional guidance from experts regarding debt restructuring and bankruptcy. If you try to discover ways to avoid repayment there could be serious consequences.
