By Mr Bankruptcy
18th February 2022
Over 1.5 million businesses were approved for a loan through the Government’s Bounce Back Loan Scheme between May 2020 and 2021. If you own one of these and are worried about how you can repay the loan, it’s important to understand the options available to you.
What is a Bounce Back Loan?
Bounce Back Loans were introduced to help businesses access emergency finance which would support them through the pandemic. Up to £50,000 could be borrowed, interest free for the first 12 months, and no repayments were required during this period. After the 12 months were up, the interest rate was 2.5% and repayments expected monthly.
What happens if businesses struggle to pay back the loan?
Ongoing financial pressures and a stop-start end to lockdown measures have led to some businesses struggling to start repaying their loans after 12 months.
While the loan is backed 100% by the government guarantee for lenders, you will still be pursued for repayment by the lender, through their normal debt recovery processes; you may receive demand letters, debt collection agencies, court action or eventually a winding up petition.
Easing the burden of repayment
To help with the repayment of Bounce Back Loans, the Pay As You Grow (PAYG) scheme was introduced, offering several ways to manage repayments:
These measures will be welcomed by many businesses, but some will still struggle to repay the loan and other options will need to be considered.
Finding support to explore your options
If your business is struggling with wider money issues, the inability to repay your Bounce Back Loan may just be a symptom of an underlying financial problem, but you can seek expert debt advice to help your business deal with a debt problem.
There are several informal and formal debt management options available that can help you to manage your debt better and minimise its impact on your business’s long-term viability.
Many owners fear the liquidation of their business when debt becomes unmanageable but, with the right support to work with your creditors, a way forward can often be found.
A company Voluntary Agreement or entering into the administration process are other options to explore with a professional debt advisor to alleviate the burden of debt. Whatever you decide, it’s important to take action as soon as possible, after the challenges and uncertainties of the past two years, to work towards a more positive future.
James Rosa Associates
We are a firm of debt advisors and debt adjustors. With a supportive 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.
Find out if 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 email@example.com to find out whether you qualify for a free consultation.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.