Coronavirus (COVID-19): Click here to find out how we can help you and your company

0800 901 2475 Menu

Do you have a Bounce Back Loan and are considering your options such as liquidation?

We can help by:

  • Assessing your circumstances.
  • Provide free, impartial advice with no obligation.
  • Putting your company into liquidation.

A CVL can:

  • Close your company in an orderly manner – writing off any unsecured debt.
  • Allow employees to claim unpaid wages and redundancy pay from the government.
  • Make your unpaid Bounce Back Loan an unsecured debt.

0800 901 2475 Freephone (including all mobiles) or Live Chat

    GDPR has been accepted.By using this form you agree with the storage and handling of your data by this website. Privacy Policy

    What happens to my Bounce Back Loan in liquidation?

    COVID-19: Coronavirus continues to impact people and business world-wide. We are fully operable and are able to help you through these difficult unprecedented times.Read moreFor immediate help & free advice, please freephone: 0800 901 2475

    The Bounce Back Loan Scheme (BBLS) has proved a lifeline to many businesses struggling over lockdown and helping them avoid liquidation. The scheme allows eligible businesses to borrow between £2,000 and £50,000 to cover additional costs for purchasing equipment to protect staff and customers, and to recover from coronavirus-related hardships.

    More information on the Bounce Back Loan Scheme

    Can I liquidate my company if I have a Bounce Back Loan?

    Even with the extra funds, businesses may find continuing to trade unfeasible in the current climate. If your company has become insolvent, recovery may not be an option. You can still liquidate an insolvent company via Creditors Voluntary Liquidation (CVL) if you’ve taken out a Bounce Back Loan.

    More options for company closure

    What happens to my Bounce Back Loan if I close my company?

    Although banks are often considered secured creditors, with the owed debts fixed over company assets. However, this is not the case with a Bounce Back Loan.

    If your company does go into liquidation, your Bounce Back Loan becomes an unsecured debt. Unsecured debts are different from secured debts, where creditors such as banks and factoring companies hold charges over company assets to secure their funding. Unlike secured debts, unsecured debts, and their creditors don’t have substantial claims over company assets.

    What are unsecured debts?

    Bounce Back Liquidate

    Can a Bounce Back Loan be written off?

    Even with a Bounce Back Loan, your company may not be able to prevent itself from becoming insolvent.

    A Bounce Back Loan is an unsecured debt. If the company has to liquidate, the lack of personal guarantees associated with the loan means it’s treated as an unsecured debt. Unsecured debt is written off once the company is liquidated, so you won’t be personally liable.

    During liquidation, a liquidator investigates your company’s financial history leading up to and during the insolvency, and if they find evidence of improper use of your Bounce Back Loan, they could make you personally liable for the debt.

    Am I personally liable for an unpaid Bounce Back Loan?

    Normally, when a company goes into liquidation, any personal guarantees that the director may have signed to secure funding will crystallise. Afterwards, the director is personally liable for those amounts.

    Bounce Back Loans are 100% guaranteed by the Government, and thus free of personal guarantees for directors, who won’t be liable for the loaned funds in liquidation. Once the debt crystallises, the bank which provided that loan will demand repayment from the Government and not the company’s director.

    However, this, and the temporary relaxation of wrongful trading laws, doesn’t mean directors can get away with actions such as fraudulent trading or abuse of the BBLS. During the liquidation, the directors’ conduct is still investigated. If they’re found to have acted improperly, those directors could still be held personally liable.

    When are you personally liable for company debt?

    In summary

    The Bounce Back Loan Scheme (BBLS) intends to help businesses struggling with debts incurred due to the coronavirus. However, even with a Bounce Back Loan, some companies may still have to liquidate, and directors may be worried about what will happen afterwards. A Bounce Back Loan won’t stop you liquidating your company, and the loan becomes an unsecured debt. You won’t be held personally liable for the loan unless your liquidator finds you’ve committed fraudulent trading or abused the scheme.

    How we can help

    If your business is struggling from coronavirus-related debt, regardless of whether you’re receiving funds through a Bounce Back Loan, speak to us. Our licensed insolvency practitioners have years of experience in business recovery and closure, and our friendly initial advisors can offer you free, impartial advice, with no obligation. Speak to us today and see how we can help you.

    Beverley Horton

    💬 Live Chat - Available

    ✅ Free confidential help & advice

    If you or your company is in financial difficulty, I may be able to help you. Our phone lines operate 9am until 9pm - 7 days a week.

    Chat with usFor immediate help & free advice, please freephone:
    Authored by Lisa Hogg

    Lisa Hogg

    Director & Licensed Insolvency Practitioner

    Beverley Horton Christopher Callaghan Stephen Hall

    Free Consultation

    Book a free telephone consultation with one of our initial advisers

      Testimonials

      Bilal Khalifeh

      star_rate star_rate star_rate star_rate star_rate

      I have received free consultation from Beverley Horton. The consultation was via online chat, easy and very effective.

      View More

      Giampiero Mastino

      star_rate star_rate star_rate star_rate star_rate

      Thank you for your fast response and help

      View More

      Alicia Reade

      star_rate star_rate star_rate star_rate star_rate

      An answer within minutes to something I needed the answer to! Great help, thank you!

      View More