The UK Government has introduced the Bounce Back Loan Scheme, also known as BBL which provides financial aid to small-scale businesses that are struggling with cash flow. By allowing companies that qualify to borrow up to PS50,000, interest-free and with no repayments for the first 12 months, it seemed as a lifeline to struggling enterprises. In the course of time, however, there have been questions raised about the repayments for Bounce Back Loans. This has led to the fact that many companies are in a position that they are not able to pay back their loans. Debt restructuring is a common practice and creditors are likely to consider voluntary liquidation.
It’s unclear what’s going to happen to these loans – will creditors and banks expect businesses to pay them back or will the bounceback loan be canceled by the bank? Many directors and business owners are considering this. They are in an uncomfortable situation due to overdrawn directors’ loans accounts. For more information, click bounce back loan
The loophole for bounce back
There’s some speculation that there might be an “bounce back loan loophole” that could allow businesses to avoid repaying their loans. This loophole is based on the fact that the BBLs are technically government-guaranteed loans. The government is liable for the repayment of the loan in case the business is in default.
This is merely an unproven theory. If a company defaults in bounce back loans the government is not obligated to take them off.
What happens if I’m not able to pay back the bounce-back loan?
There are several options available in the event that you are unable to pay back your bounceback loan.
It is possible to try restructuring your debt. Negotiating with your lender could be a way of negotiating a smaller sum of payment or a more extended repayment time.
You can choose to use liquidation of creditors’ choice. This is a formal procedure that allows companies to close their business and pay the creditors.
Your loan could be repaid in total. It could result in serious consequences like damage to your credit score as well as legal action.
What’s the best way to manage your bounce-back loans?
It is important that you seek out professional assistance if you are having difficulty repaying the bounce-back loan. A financial advisor can help you assess your options and come up with strategies to manage your debt.
You are not the only one facing this dilemma. It is not a lonely place. The government has set up several support programs for businesses who are having difficulty repaying bounce back loans.
Please do not hesitate to ask for help in case you’re having difficulties repaying your bounceback loan. Help is available to restore your life to course.
In times of financial difficulty and insolvency, professionals like Company Doctor specialize in helping businesses navigate the complex liquidation process. Their knowledge extends far beyond traditional insolvency proceedings and they can offer valuable guidance on debt restructuring or voluntary arrangements as well as other feasible solutions. Insolvency practitioners have the knowledge and experience to assess the financial health of a business, evaluate its viability, and suggest appropriate courses of action. By collaborating closely with companies they are able to provide customized guidance and assistance, assuring an easy transition through the liquidation process.
Since the effects of the virus continues to impact businesses as well as individuals, the future of Bounce Back Loans remains uncertain. As businesses struggle with making repayments on these loans, it is vital to approach the situation responsibly and seek the advice of experts in debt restructuring and insolvency. The consequences of trying to take advantage of loopholes or evade payment obligations are grave.