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

Principal Packaging Ltd

Kelly Burton • Service Agency • Administration

Sheffield administrators Wilson Field has helped save all 14 jobs at a Lancashire packaging supplier and manufacturer after it was bought out of administration.

Administrators Kelly Burton and Joanne Wright from business turnaround experts Wilson Field were appointed joint administrators on 17 February after Principal Packaging Ltd suffered cash flow problems.

The company, based at Pit Hey Place in Skelmersdale, was one of the main independent providers of quality packaging for the retail food industry, and major food and dairy suppliers.

Directors Tracy and Richard Sharratt took early advice and the business was sold to new company Surepac Ltd as a going concern saving all 14 employees’ jobs.

Kelly Burton from Wilson Field said:

“Historically, the company offered a holding service to its customers. This meant that it held a significant amount of stock at any one time, which tied up a substantial amount of cash.

“This created cash flow problems and was exacerbated in the early part of 2016 when the amount available on the company’s funding facility was reduced.

“Directors took early advice from Wilson Field with the business sold to Surepac Ltd as a going concern, safeguarding all 14 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team”.

Principal Packaging, started in 2006, served packaging needs for meat, fish, horticulture and poultry sectors throughout the United Kingdom and Ireland and traded successfully in the early years.

It gained a reputation for being one of the most professional, yet affordable, companies in a competitive market with its high-quality paper, plastic or board packaging, custom print services and high customer service levels.

Oldham Precision

Kelly Burton • Construction & Engineering • Administration

Machining engineers Oldham Precision has been bought out of administration saving all 12 jobs.

The company’s principal activity was the sub-contracting manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.

Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.

Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.

After advice from Wilson Field, the business was sold to the existing management team as a going concern saving all 12 employees’ jobs.

Kelly Burton, director in the Leeds office at Wilson Field said;

“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 employees’ jobs and offering a better return for the company’s creditors than alternative options.

“The new company will be under the same management offering the same standards of service to its customers.”

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 January 26.

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.

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