Bounce Back Loan repayments can be extended if a company is struggling to maintain them. Your company’s lender should offer flexible repayment options, including:

• Extend their loan’s repayment terms from six to 10 years.
• Make interest-only payments for six months.
• Take a repayment holiday of up to six months.

These allow the company breathing space if they’re struggling to maintain the repayments, but more formal debt recovery solutions may be required if the company has debts it cannot afford to repay – these can indicate insolvency. Seek advice from an insolvency practitioner like us to explore the options best for your company. Depending on your company’s circumstances, this could involve writing off the Bounce Back Loan, restructuring the company or closing it, then starting again, or walking away.

How to Extend a Bounce Back Loan

If your company finds it hard to repay its Bounce Back Loan, extending the Bounce Back Loan’s repayment period is possible. The company can do so via a government initiative, which the company’s lender should provide: the Pay As You Grow (PAYG) scheme, which intends to make repaying a Bounce Back Loan easier for struggling companies.

These options include:

• Extend repayment term
  Companies can request to extend their loan term to 10 years from the original six. This is at the same fixed 2.5% interest rate.
• Interest-only repayments
  Companies can request to make interest-only payments on their Bounce Back Loan for six months. They can do this up to three times in the loan’s term.
• Request a repayment holiday
  Companies can request a repayment holiday of up to six months.

Help if you cant repay your company’s Bounce Back Loan

If your company cannot repay its Bounce Back Loan even with the help listed above, it can indicate deeper financial problems. Bounce Back Loans are unsecured debts in insolvency, and they didn’t require personal guarantees, thanks to the loans being 100% government-backed.

The company has other options if it can’t repay its Bounce Back Loan:

• Repay what you can afford in instalments
  Company Voluntary Arrangements (CVA) are formal repayment arrangements for companies that could be viable were it not for the level of debt. The IP will assess the company’s cash flow, calculate its monthly affordability, and propose an arrangement to creditors. These arrangements include all the company’s unsecured debts. The company continues trading for the duration, which can maintain goodwill with customers.
  More on Company Voluntary Arrangements
• Restructure the company through administration
  In some circumstances, the company would benefit more from restructuring than just repaying. Administration offers directors protection from creditor pressure while the insolvency practitioner restructures the company to rescue it as a going concern and return it to a profitable state, making it more appealing to potential buyers.
  More on administration
• Closing the company through liquidation
  Sometimes a company’s debt can be so severe that recovery isn’t possible, and the directors would be better off closing and walking away. The insolvency practitioner may suggest the company enters Creditors Voluntary Liquidation (CVL). This closes the insolvent company and writes off its unsecured debts, including an unaffordable Bounce Back Loan.
  More on Creditors Voluntary Liquidation (CVL)

Whatever your company’s circumstances, our experienced initial advice team can assess its circumstances and provide free, confidential advice with no obligation.

1. Speak with our initial advisers via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth.
2. During the consultation, we will advise if an insolvency procedure is the most appropriate route forward and what alternative options are available.
3. After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.

In summary

Companies with outstanding Bounce Back Loans can apply to extend their repayment periods if they’re struggling to repay. Through the Pay As You Grow Scheme (PAYG), directors can extend their company’s repayment term from six years to 10 or delay repayments for six or 18 months. The company can also make interest-only repayments for six months, up to three times in the loan’s duration, or pause repayments after the initial instalment.

If the company has more substantial debts, it may benefit from a formal insolvency process. Which of these is most suitable depends on the company’s circumstances. Contact us for free, tailored, impartial advice with no obligation.

Case Studies

M J Squire Limited

Kelly Burton • Construction & Engineering • Creditors' Voluntary Liquidation (CVL)

A bespoke joiners and shop fitters in Sheffield, M J Squire Limited, had been in its trade for more than 30 years.

However, recently it has been forced to close due to the downturn in the construction and retail industry.

The company was located at Orgreave Close in Sheffield, after working for many household names over the years including House of Fraser, Levi’s, Austin Reed and Tommy Hilfiger.

Until 2014, it had been a profitable company but over the past couple of years, it had been unable to secure profitable contracts.

February 10^th, 2016 saw the appointment of Wilson Field’s Andy Wood and Robert Dymond as liquidators. This development for the company came as a result of suffering cash flow problems.

Operations at M J Squire Limited have now ceased and regrettably, all nine roles within the company were made redundant.

Andy Wood, insolvency practitioner from Wilson Field, spoke about his work on this case. 

“Declining sales at M J Squires significantly impacted cash flow and the business’ ability to meet its liabilities. In the face of tough market conditions, the director has taken the difficult decision not to continue trading. The business has closed and the assets are being sold.”

“It is very sad to see this well-known local business cease to trade after over 30 years. The downturn in the retail sector has hit this business hard.”

Aristocrat Pet Supplies

Kelly Burton • Retail • Administration

The business and assets belonging to a Sheffield online pet supplies company are up for sale. Aristocrat Pet Supplies, a family-owned and run business, milled its own feed and seed on-site in Sheffield and has been trading for over 25 years selling agricultural raw materials, livestock, textile raw materials and semi-finished goods.

Sheffield-based insolvency specialists Wilson Field were called into the firm after it experienced increasing pressure and competition online. Andy Wood and Lisa Hogg were appointed as joint administrators for the company on 26 January.

Wilson Field is trading the business in the short term with a view to finding a potential buyer for the company based on Holbrook Green Industrial Estate near Sheffield.

Andy Wood, associate director and insolvency practitioner at Wilson Field said:

“The business has encountered increased competition in recent years, principally from discount stores which have reduced margins.

“It has been on the market for several months but has not attracted any significant interest so far. As administrators, Wilson Field is trading the business in the short term to maximise realisations on a reduced staff base of seven.”

Aristocrat, which employed 19 staff, offered a range of pet supplies including dog and cat treats, chews, small animal bedding, wild bird supplies, poultry and aquatic food.

Statestrong Limited

Kelly Burton • Manufacturing • Administration, Creditors' Voluntary Liquidation (CVL)

Insolvency experts at Wilson Field have helped turn around the fortunes of a loss-making manufacturing company in Lancashire providing a new future for its 80 employees.

Businessman Russell Blaikie acquired the struggling 40-year-old Statestrong Limited, headquartered in Lytham St Annes, through a pre-pack sale and has been able to help the company immediately utilising his expertise in manufacturing and management.

Arrangements for the purchase of Statestrong’s business and assets were negotiated by Sheffield business specialists Wilson Field, who effected the sale shortly after being appointed.

The company, which manufactures and supplies aerosol and liquid products for use in health and beauty, household, automotive and industry globally, posted sales of £12m last financial year, but had suffered pressure from creditors with outstanding arrears.
The total value of the deal is undisclosed but includes the business and the assets of the company based on Boundary Road in Lytham St Annes and Tarporley in Cheshire, which will now trade as Statestrong Products Limited.

Mr Blaikie said:

“Transactions of this nature are sensitive and require careful handling. The team at Wilson Field provided exactly the right professional approach.”

Wilson Field’s insolvency practitioners Kelly Burton and Joanne Wright worked closely with Mr Blaikie along with senior corporate case administrator Gareth Kinneavy.

Kelly Burton, said:

“The company had a wealth of expertise but was straddled with financial liabilities which ultimately made its future questionable. Looking forward, a previously distressed business now has a viable future.”

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