Bounce Back Loan Voluntary Repayment Scheme
The government’s Voluntary Repayment Scheme for Bounce Back Loans was introduced to allow businesses and individuals to come forward and repay loans they were not entitled to, had misused, or had stopped repaying.
The scheme officially closed on 31st December 2025.
With the voluntary route now no longer available, many company directors are understandably concerned about:
- What happens next
- Increased investigations into Bounce Back Loans
- Personal liability risks
- Whether insolvency may be a safer option
In this guide, we explain what the closure of the scheme means and what directors should do now.
What Was the Voluntary Repayment Scheme?
The Voluntary Repayment Scheme allowed borrowers to:
- Repay Bounce Back Loans taken out incorrectly
- Set up repayment plans with lenders
- Clear outstanding balances voluntarily
It was aimed primarily at cases where:
- The business was not eligible
- Turnover had been overstated
- Funds were misused
- Repayments had stopped
While repayment did not provide immunity from investigation, it allowed borrowers to resolve outstanding debts before formal recovery or enforcement action increased.
The Scheme Has Now Closed - What Does This Mean?
Since the scheme has expired:
- Borrowers can no longer come forward under the voluntary framework
- Government and lenders are expected to increase recovery action
- Investigations into misuse and fraud are continuing
Directors who still have outstanding Bounce Back Loan issues may now face:
- Formal debt recovery
- Regulatory enforcement
- Insolvency Service investigations
- Potential director disqualification
- In serious cases, criminal proceedings
This does not mean every director will be penalised, but it does mean early advice is now more important than ever.
Will There Be Increased Bounce Back Loan Investigations?
Yes, the closure of the scheme forms part of wider government efforts to recover Covid support funds.
Agencies involved include:
- The Insolvency Service
- HMRC
- The Public Sector Fraud Authority
- Law enforcement
Their focus includes:
- Misuse of loan funds
- Incorrect applications
- Multiple loans
- Businesses dissolved to avoid repayment
Director conduct during company closures is also being closely reviewed.
What If My Business Borrowed Correctly but Can’t Repay?
Many companies took Bounce Back Loans properly but later became insolvent.
If this applies to you, there are still options.
Pay As You Grow (PAYG)
Some businesses may still qualify for:
- Extended loan terms
- Interest only periods
- Temporary repayment holidays
Your lender can advise if this is available.
Closing an Insolvent Company with a Bounce Back Loan
If your company cannot afford to repay its debts, including the Bounce Back Loan, a Creditors Voluntary Liquidation (CVL) may be appropriate.
In most genuine cases:
- The Bounce Back Loan is included in the liquidation
- The debt is usually written off
- Directors are not personally liable where funds were used properly
However, the Insolvency Service will always review director conduct.
This is why getting professional advice before taking action is critical.
What If I’m Worried About Misuse or Errors?
Some directors are now concerned that:
- Funds may have been used incorrectly
- Turnover figures were estimated incorrectly
- Multiple loans were taken unknowingly across companies
If this applies to you, it is essential to:
- Get independent insolvency advice
- Understand your exposure
- Explore the safest route forward
Early advice can often reduce risk and stress.
I’ve Already Been Contacted About My Bounce Back Loan - What Should I Do?
If you’ve been contacted by regulators or enforcement bodies:
- Follow their instructions carefully
- Do not ignore correspondence
- Seek professional advice immediately
You can still speak to your lender about repayment options, but formal advice is strongly recommended.
Getting Free, Confidential Advice
The closure of the Voluntary Repayment Scheme does not mean there are no solutions.
Every director’s situation is different.
Some may benefit from repayment plans.
Others may be better protected through formal insolvency procedures.
How Business Helpline Can Support You
At Business Helpline, we provide free, confidential advice to directors dealing with:
- Bounce Back Loan concerns
- Insolvent companies
- Repayment difficulties
- Director risk and investigations
We’ll help you understand your position clearly and guide you toward the most appropriate solution.
📞Call our free helpline on 0800 088 2142
Or request a confidential consultation online.
If your company is under pressure, don’t wait until a petition arrives.
