Bounce Back Loans
It's important to take action as soon as possible if you are unable to repay your Bounce Back Loan.
By seeking help and support, and by working with your lender and other creditors, you can find a solution that works for you and helps you manage your debts.
What was the bounce back loan?
What was the bounce back loan?
The bounce back loan provided financial support to businesses across the UK that:
were losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak
could benefit from £50,000 or less in finance.
A lender could provide a six-year term loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount was £50,000.
The scheme gave the lender a full (100%) government-backed guarantee against the outstanding balance of the facility (both capital and interest).
The borrower always remains fully liable for the debt.
Options for Bounce Back Loan Debt
Options for Bounce Back Loan Debt
If you are unable to pay back your Bounce Back Loan, there are a number of steps you can take to address the situation. Here are some steps you can consider:
Contact your lender: If you are having trouble making your repayments, the first step is to contact your lender. Explain your situation and request one of the following:
Request an extension of theloan term to 10 years from six years, at the same fixed interest rate of 2.5%.
Reduce monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan
Take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.
Seek debt advice: If you are struggling with debt, it can be helpful to seek the advice of a business adviser or debt adviser. They can help you understand your options and create a plan to manage your debts.
Negotiate a payment plan: If you are unable to repay your Bounce Back Loan in full, you may be able to negotiate a payment plan with your lender. This could involve making reduced repayments over an extended period of time.
Consider insolvency proceedings: If you are unable to repay your Bounce Back Loan and other debts, you may need to consider insolvency proceedings. This could involve entering into an individual voluntary arrangement (IVA) or filing for bankruptcy for sole traders and partnerships or Voluntary Liquidation or business rescue options for limited companies.