COVID Loan Support

Bounce Back Loans & CBILs

Struggling with Coronavirus loan repayments? Many businesses still haven't bounced back — but you have options. We're here to help.

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Understanding Bounce Back Loans & CBILs

Bounce-back loans were provided during a time of need. The aim of these Coronavirus loans was to help keep UK businesses afloat when their futures could have been in question.

While these loans did help many business owners, many are now struggling with the repayments for bounce-back loans and CBILs. The pandemic was particularly hard for smaller and medium-sized businesses, but these loan schemes allowed them to access finance quickly.

The reality is that many of these businesses still haven't bounced back!

The Two COVID Loan Schemes

BBL

Bounce Back Loan Scheme

Available to all trading businesses in the UK at the time. Applications were self-certified based on 2019 annual turnover, with borrowing capped at 25% up to a maximum of £50,000.

Max £50,000

Government guaranteed

Self-certified

25% of turnover cap

CBILs

Coronavirus Business Interruption Loan Scheme

Also provided in 2020 to businesses that struggled as a result of the pandemic. Lenders could offer up to £5 million in various forms. The application process was more in-depth than BBL.

Up to £5 million

More detailed application

Personal guarantee over £250k

Under £250k = gov guaranteed

What Happens If I Can't Pay My Bounce-Back Loan?

If you can't pay your bounce-back loan, you're probably feeling quite worried. The important thing is that you're not alone, and you have options available to you.

Pay As You Grow (PAYG) Scheme Options:

Extend Repayment Term

Change from six years to ten years, reducing monthly payments. More interest will be added overall, but you get breathing space when you need it most.

Six-Month Repayment Break

All monthly payments are paused for six months while your business gathers more money.

Interest-Only Payments

Request to only pay the interest payments on your Coronavirus loan for up to six months.

Critical Warning: Don't Try to Strike Off!

You might have heard many people try and strike a company off with a bounce-back loan — please don't listen to them. Doing this could get you into serious trouble and has actually landed some directors in jail!

When Companies House advertise the business being struck off, the banks are being notified and objecting to it. This can land you in a lot of trouble as a company director and is not worth the risk.

You cannot strike a company off with a bounce-back loan. You could end up being made personally liable for your bounce-back loan.

Will Bounce-Back Loans Be Written Off?

Sometimes, loans can be written off; however, certain criteria must be met. Loans that have been personally guaranteed by a director are unlikely to be written off.

Fortunately, bounce-back loans were guaranteed by the government. This means that provided you have acted responsibly and used the money for the economic benefit of the company, you will not be made personally liable if you decide to liquidate your business.

Good News for Responsible Directors

Responsible directors who enter a creditors' voluntary liquidation will find that the bounce-back loan is written off. You must not have committed any bounce-back loan fraud or any wrongdoing within the company.

Bounce-Back Loan Fraud

Bounce-back loan fraud can be identified in a few ways. Here are some of the most common:

Applying for too much money — claiming more than 25% of your 2019 turnover

Multiple loans — applying and keeping loan money from more than one lender

Personal use — using the loan money for your own personal benefit

Committed BBL Fraud?

If you have committed bounce-back loan fraud, it's best to seek advice as soon as you can. The sooner you address the issue, the better your options may be.

What Could the Loan Be Used For?

Those applying for loans were advised on what the money could be spent on — the economic benefit of the company.

Directors who applied for the correct amount of money and used it for the economic benefit of the company should face no issues if they have to place their company into liquidation.

All of the bounce-back loans were government-backed from accredited lenders. This means that the government would be responsible for paying the loans back if the company was unable to.

Frequently Asked Questions

Common questions about bounce-back loans and CBILs

What is a bounce-back loan?

A bounce-back loan (BBL) was a government-backed COVID-19 support scheme that allowed UK businesses to borrow up to 25% of their 2019 annual turnover, capped at £50,000. The loans were self-certified, government guaranteed, and designed to help businesses survive the pandemic.

Can I strike off my company if I have a bounce-back loan?

No, you absolutely cannot strike off a company with an outstanding bounce-back loan. Banks are notified when Companies House advertises a strike-off and will object. Attempting this could result in serious consequences, including being made personally liable for the loan. Some directors have even faced jail time for attempting this.

Will my bounce-back loan be written off if I liquidate?

Yes, if you have acted responsibly and used the money for the economic benefit of the company, your bounce-back loan will be written off in a creditors' voluntary liquidation (CVL). The loan was government guaranteed, so you will not be personally liable provided you haven't committed fraud or wrongdoing.

What is the Pay As You Grow (PAYG) scheme?

PAYG is a scheme that offers three options for struggling BBL borrowers: extend your repayment term from 6 to 10 years (reducing monthly payments), take a 6-month repayment break, or make interest-only payments for up to 6 months. This can provide crucial breathing space for your business.

What counts as bounce-back loan fraud?

BBL fraud includes: applying for more money than you were entitled to (more than 25% of 2019 turnover), obtaining loans from multiple lenders, or using the loan money for personal benefit rather than the economic benefit of the company. If you've committed fraud, seek advice immediately.

What is the difference between BBL and CBILs?

Bounce-back loans (BBL) were capped at £50,000 with no personal guarantee required, while Coronavirus Business Interruption Loans (CBILs) could be up to £5 million. For CBILs under £250,000, there was no personal guarantee; over £250,000, a personal guarantee was required. CBILs had a more detailed application process.

Struggling with Your Bounce-Back Loan?

You're not alone. Many directors are in the same position. Get honest, confidential advice about your options today.

Call 0800 086 2766 Text 0741 5805 851