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.
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 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.