What happens if my business can’t repay its Bounce Back Loan?

By Mr Bankruptcy

29th June 2021

Bounce Back Loans (BBL), which were introduced to help businesses stay afloat during the pandemic, have been in demand with more than 1.5 million businesses taking advantage of the scheme.

However, with the first repayments due in June, what will happen to those businesses which will struggle to repay their BBL?

How do Bounce back loans work?

Businesses can borrow up to 25% of their turnover, with loans ranging from £2-£50k. The loan is interest-free for the first 12 months, during which time there’s no requirement to make any repayments at all. After this period, interest is at a fixed rate of 2.5% and businesses have a further 5 years to repay the loan.  

Repayment options in challenging times

Despite the easing of lockdown rules, many businesses aren’t out of the woods yet. With ongoing financial uncertainty, many businesses worried that they will struggle to make loan repayments are considering their options:

There is no requirement for a personal guarantee for a BBL and no personal liability for a limited company director, reducing their personal risk. However, for this to be the case it’s important that the loan was taken out in line with the conditions of the scheme. Businesses should expect the banks to be rigorous in pursuing them for repayment and not simply rely on the government just because they are acting as guarantor.

Taking advice

It is important for businesses concerned about repaying their BBL to seek advice as soon as possible. With a succession of lockdowns, it has been hard for businesses to rebuild consistency and to manage their financial situation, but with the right support the situation can become less overwhelming, and a path forward mapped out.

Non-judgemental advice from James Rosa Associates

James Rosa Associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes.

Our services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Do you qualify for a free consultation?

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

Will lifting the ban on winding up petitions herald a coming storm for businesses?

By Mr Bankruptcy

17th June 2021

The ban on winding up petitions during the Covid-19 pandemic has been a lifeline for many businesses. Yet, with this ban now due to be lifted at the end of September, are many businesses facing a financial storm they aren’t yet ready to weather?

The impact of banning winding up petitions

The temporary ban on winding up petitions came as a relief to many businesses fearful of how they would pay creditors in the face of a dramatic decline of income. Being able to keep their businesses going during the pandemic has also protected many other jobs and these businesses will be part of the recovery of the economy as lockdown continues to ease.  

However, a recent ONS survey on the impact of Covid-19 indicated that almost 15% of UK businesses were at risk of permanently closing by the start of April. With many Covid-19 related financial support schemes coming to an end, creditors will once again start taking action to recover debts, leading to the fear that a dam is now set to burst, releasing a flood of creditor demands and increasing insolvencies and liquidations.

What happens when the taxman calls?

There’s a lot of concern over businesses now facing the reality of debts. The Institute of Directors and R3 (the trade association representing insolvency and restructuring practitioners) have both written to Business Secretary Kwasi Kwarteng to urge him to work with HMRC to help businesses at risk of collapse.

The reason for this focus on HMRC is that they have made themselves the priority ‘creditor’ for the repayment of debt. The fear, therefore, is that HMRC if are quick to demand taxes owed, other creditors will also jump onto the bandwagon and be prompted to demand repayment of their debts. This could put many businesses under pressure to repay debts when their own financial position has improved little, and they are still suffering the effects of extended lockdown and low consumer confidence.

The time to act is now

With creditors looming, there is no escaping the fact that many businesses with debts will face some difficult decisions on how best to protect their long-term viability. It’s not always clear how this can be done and many business owners will be feeling overwhelmed at the thought of what lays ahead when the various government financial support schemes come to an end.

The key is not to avoid or delay making decisions but to seek advice and support as soon as possible in order to take control of your debts.  

Non-judgemental advice from James Rosa Associates

James Rosa Associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes.

Our services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Do you qualify for a free consultation?

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

We need to talk about debt

By Mr Bankruptcy

2nd June 2021

People in the UK owed £1,712.9 billion at the end of March 2021; the Citizen Advice Bureau in England and Wales was dealing with 1.673 debt issues every day in the year to April 2021.

For many people struggling with unmanageable debt, being able to talk about it should be an important first step to tackling it. However, while the two issues are closely linked, there’s still a taboo about the subject of debt without the same kind of campaign to break it down that we’ve seen for mental health.

Why debt can be difficult to talk about?

Debt can feel like a very personal and private matter. It often causes feelings of shame, embarrassment and worry about what others will think about not managing your finances better. People are also anxious about the conflict it can cause in a relationship and causing stress for others, and we aren’t comfortable with asking people we’re supporting financially to contribute more. Also, it can also often be the case that you’re simply ignoring signs that you are in debt.

Why you should talk about debt

Even though it’s difficult to talk about, there are many benefits to opening up about financial difficulties:

How to start talking about debt

There are some simple steps you can take to help build up your confidence and have a successful conversation about debt. Firstly, prepare for the conversation, thinking about what a partner may want to know. Gather your facts and figures in advance so you don’t get flustered by questions and make sure you allow plenty of time to chat, with no distractions. Try not to interrupt each other or get too emotional, taking time to understand what the other person is saying.

If you’re seeing the signs in someone close to you that they are heading into unmanageable debt, it may help them if you start the conversation. Whoever initiates discussion, remember that debts take a huge toll on people’s wellbeing but no matter how hard it may be, it’s never to soon to talk about debt and seek advice.

Non-judgemental advice from James Rosa Associates

James Rosa Associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes.

Our services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Do you qualify for a free consultation?

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

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