The UK Government introduced the Bounce Back Loan Scheme, or BBL which provides financial aid to small-scale businesses who are experiencing cash flow problems. The scheme allows business that are eligible to borrow up to PS50,000, interest-free and without repayments for the first 12 months, it appeared to be a lifeline for struggling companies. In the course of time, however, questions have been raised about the repayments for Bounce Back Loans. This has led to the fact that many businesses find themselves in a situation where they’re unable to pay their loans. Debt restructuring is common and creditors are likely to contemplate liquidation by voluntary.
It’s unclear what will occur to these loans. will creditors and banks expect businesses to pay them back or will the bounceback loans be cancelled by the bank? The question was on the minds of numerous directors and business owners who are now facing a dilemma with overdrawn directors loan accounts and personal guarantees. For more information, click bounce back loan loophole
The loan loophole for bounce-back
Many people believe that there could be a “loophole for bounce-back loans” which could allow companies to not be required to repay their loans. This loophole is based on the fact that the BBLs are technically government-guaranteed loans. If a business defaults on loans, then the government is accountable to pay back the lender.
This is still speculation. There is no guarantee that the government will actually erase bounce-back loans even if companies default on them.
What happens if I’m unable to pay back the bounce-back loan?
You have several alternatives in the event that you aren’t able to pay the bounce-back loan.
Restructuring your debt can be an alternative. Negotiating with your lender could result in a lower sum of payment or a more extended repayment period.
You can choose to go through the voluntary liquidation of creditors. This process permits businesses to shut down and to pay creditors.
The loan you took out could be paid in complete. However, this could have serious consequences, such as an impact on your credit rating and the potential for legal action.
The best way to handle your bounce back loan
If you’re struggling to repay your bounce back loan, it is important to seek out professional help. A financial advisor can help you assess the options available and formulate an approach to repay your debt.
Be aware that you’re not the only one. You are not alone. The government has put in place a variety of assistance programs for companies that are struggling to pay back their bounce-back loans.
Don’t hesitate to ask for help in case you’re having difficulties paying back the bounceback loan. Get help to restore your life to the right track.
In times of financial difficulty and insolvency, professionals like Company Doctor specialize in helping businesses navigate the complex liquidation process. They’re experts in more than traditional insolvency processes, and are able to give advice on other feasible options, such as voluntary agreements and restructuring debt. Insolvency specialists have the ability and knowledge to assess the financial condition of a business as well as determine its viability and make appropriate recommendations. By working closely with companies, they are able provide personalized advice, and help ensure that the liquidation is smooth and easy.
Since the effects of the pandemic continues to affect businesses and businesses, the direction of Bounce Back Loans remains uncertain. Businesses could face challenges in repayment of the loans. It is important to follow a shrewd approach and seek professional guidance. If you attempt to find ways to avoid repayment the loan, you could face serious consequences.
