The PAYG scheme is designed to offer a little bit of wriggle room for those who might not be completely on top of their payments. Making repayments might still feel like a step too far for many. However, there are ways around this.
One of the main benefits of the BBLS is the fact that the loan itself is unsecured. This means that the loan is taken out without any collateral such as property. We wouldn’t necessarily advocate unsecured loans but, in this instance, it might be beneficial because it comes with government guarantee because they gave 100% security to the banks for these loans. However, government backing only comes into play if a business is declared insolvent, so a trading business that is still in operation will still have to pay the money back themselves.
Therefore, while company directors should feel a little relief, they should also be aware that governmental intervention is very much the last case scenario. They will still be expected to make repayments unless the situation gets very desperate.
Can I go insolvent with a Bounce Back Loan?
If your business goes through liquidation then the BBL will work in the same way as any other loan that was taken up in that time. This means that should the company become insolvent and needs to enter a formal liquidation process, the Bounce Back Loan will be included.
There are two ways to push through with insolvency:
A creditor forces you into liquidation but this is a long process, including a court case.
Directors can push through the liquidation of the company themselves. This is known as a Creditors Voluntary Liquidation (CVL).
A licensed insolvency practitioner will go through the entire process. This means that they will identify company assets, sell off those assets for the benefit of creditors, and they will organise the whole procedure on your behalf.
The final result of the liquidation is that the company will no longer exist as a legal operator, and any debt remaining from this point forward will be written off unless it has previously been secured with a personal guarantee. A Bounce Back Loan is included in this.
Did I mistakenly take a Bounce Back Loan?
There are two different levels of fraud: soft fraud and hard fraud.
Soft fraud is overestimating figures in order to gain access to a larger loan. Exaggerations will be based on fairly legitimate evidence. Many people will fall into this category and they will need advice on how to best deal with this situation.
If you think you are going to be accused of BBL fraud then you should immediately seek legal help. You may have accidentally overestimated figures or unintentionally mislead those offering the BBLS, so it’s important to make sure that you will be fully prepared for any negative outcome.
We can help you to understand the makeup of your situation and we can work out the best solution for your problem.
If you want more information on this topic then have a look at our Bounce Back Loan page. We can come to your aid if you are having troubles with your Bounce Back Loan. Please get in touch with us at 0800 088 2142.