Bounce Back Loan Problems
If your company has an outstanding Bounce Back Loan (BBL) and you are struggling to meet the monthly repayments, it is vital to understand your position clearly.
We help directors who no longer wish to continue trading to exit their companies in a structured, compliant, and lawful manner.
Can I stop paying my bounce-back loan?
A Bounce Back Loan is a liability of the limited company, not you personally. If your company has no assets and is genuinely unable to repay its debts, there are formal legal processes to address the shortfall.
If your company is under intense financial pressure, you are not alone—but it is important to act early.
How We Can Help
If you no longer wish to run your company, we can assist with:
- Transferring ownership of the company.
- Changing the registered office address
- Handling the complex administrative burden.
- Managing the required next steps based on your specific situation.
Our service is designed to provide a clear, structured exit without unnecessary delays. We offer straightforward guidance with no jargon and no high-pressure sales tactics.
The Reality of Unsecured Corporate Debt
A Bounce Back Loan granted to a limited company was provided on an unsecured basis. Legally, it is treated similarly to any other unsecured corporate debt. However, remember that the government guarantee on the loan protects the lending bank against default, not the company directors.
If your business is no longer viable and cannot pay its creditors, it may eventually be wound up via a winding-up petition or a voluntary liquidation process. If the company is formally dissolved or liquidated with no assets, the remaining corporate debt is written off, and the government compensates the bank for its losses.
What happens if I stop paying and the company enters liquidation?
If the company has no assets to liquidate, the debt itself remains with the company and is ultimately written off. Providing that you, as a director, adhered to the terms and conditions of the Bounce Back Loan scheme, the debt will be treated no differently than any standard unsecured trade credit.
BBL Compliance Check
Licensed insolvency practitioners & liquidators have a statutory duty to review how Bounce Back Loan funds were utilised.
- Compliant Use: If the loan was used entirely to support the economic running of the business (which can include paying reasonable directors’ wages or standard company expenses to keep the firm afloat) and you can demonstrate this with clear records, you should not face personal liability.
- Misconduct & Misuse: Issues arise if funds were diverted for personal use (e.g., transferred directly to a personal account without a clear commercial justification), used to preferentially clear personal debts, or if the initial application was fraudulent (such as inflating company turnover to secure a larger loan).
Bounce Back Loans introduced during the pandemic had very flexible eligibility criteria, allowing businesses to claim up to £50,000 quickly and on an unsecured basis. If your business has failed despite your best efforts, the law provides clear routes to wrap up the company’s affairs.
If you are unsure of your legal responsibilities or what to do next, please get in touch with us for straightforward guidance