Yes, you can write off a Bounce Back Loan (BBL) during a formal insolvency procedure such as a Company Voluntary Arrangement (CVA), Creditors Voluntary Liquidation (CVL) or an Administration. In these cases with a BBL being an unsecured debt, it can be written off. However, it cannot be written off whilst a company is active and trading outside of an insolvency procedure.

What if I can’t afford to repay my Bounce Back Loan?

If your company has debts it can’t afford to repay, including a BBL, you should take proactive steps to look at possible solutions. You could consider:

• Speaking to the lender
  Reach out to the lender to discuss repayment difficulties. They may offer revised payment plans.
• Explore government help
  Check for any government-led repayment assistance or flexible payment options that may be available, such as the Pay As You Grow scheme (PAYG).
• Contact a licensed insolvency practitioner
  Contact us for free to discuss the company’s financial situation and explore all possible solutions.

Can I strike off a company with an outstanding Bounce Back Loan?

You can apply for the striking off, or dissolution of your limited company, however, it is a process intended for companies that are no longer trading and without any outstanding liabilities and will not write off a BBL or other secured debts the company has. Creditors, including the lender of a Bounce Back Loan, have the right to object to the company being struck off.

Key points for you should to consider, include:

• Criteria for dissolution
  There are set criteria for dissolution, clarified on the government website.
• Legal consequences
  Attempting to strike off a company without addressing all its debts and meeting the set criteria could lead to legal repercussions, including potential allegations of wrongful or fraudulent trading. The government also introduced new legislation to restore a dissolved company and investigate its directors’ conduct.
• Appropriate procedure for insolvent companies
  If a company cannot repay its liabilities, which may include a Bounce Back Loan, a formal insolvency process such as a Creditors’ Voluntary Liquidation (CVL) might be more appropriate.

Will I be held personally liable for a Bounce Back Loan?

Bounce Back Loans did not require personal guarantees and were 100% backed by the government for instances when the company could not repay. In summary, directors are generally not held personally liable for a Bounce Back Loan unless there is evidence of misuse or fraudulent use of the loan.

How we can help you to write off a Bounce Back Loan

A BBL is classed as an unsecured debt and can be included in an insolvency procedure. It will be paid out in liquidation after any debts that have security with creditors. Bounce back loans were 100% backed by government, so lenders will look to the government for repayment, if the debt can’t be covered by the sale of assets in liquidation.

If your company is struggling with debt, whether or not it includes an unpaid Bounce Back Loan, speak to a licensed insolvency practitioner, such as ourselves. Taking advice and action to tackle the debt is essential if you want to save the company and minimise any potential repercussions.

• Repay your company debts in a payment plan via a Company Voluntary Arrangement  (CVA) 
  A CVA is a payment plan between a company and its creditors that allows you to restructure your company’s unsecured debts, while continuing to trade, by making affordable monthly payments over a fixed period. We start by assessing your company’s financial position, determining a realistic repayment amount. These terms are then proposed to your creditors and if approved, your company enters the repayment plan. When in place, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The process lasts for up to 5 years and on successful completion, any remaining unsecured debt in the arrangement is written off.
  Find out more about Company Voluntary Arrangements
• Restructure your company through administration
  Administration is an insolvency procedure for companies that are insolvent. Entering the procedure, your company will be in a temporary state of protection by a moratorium, that halts creditor action, including legal proceedings, giving your company the breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner more profitable organisation. If rescuing the company isn’t a viable option we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
  Find out more about Company Administration
• Close your company down via a Creditors Voluntary Liquidation (CVL)
  A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your company, ceasing its trading operations, realising any assets and removing the threat of creditor legal action. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed your company’s unsecured debt will be written off and the company is dissolved, allowing you, the director to move on.
  Find out more about a Creditors Voluntary Liquidation
• Close your company down and start again via a pre-pack liquidation
  A pre-pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The company name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
  Find out more about Pre-pack Liquidations

How to get in touch with us: The next steps for engagement

1. Speak with our initial advisers
   Make contact with our team, via phone, filling in a form or online chat. If suitable, we will arrange a free consultation with one of our consultants to discuss your situation in depth.
2. Initial assessment
   During the consultation, we will assess whether the liquidation of your company is the most appropriate route forward, or whether alternative solutions, such as a CVA or administration, would better suit your company’s problems.
3. Formally engage with Wilson Field
   We will confirm the necessary steps to place your company into liquidation, or an alternative insolvency solution and will issue you with the relevant documentation for you to formally engage is.

In summary

If your company is still actively trading, there is no way to simply write off a Bounce Back Loan. To write off a BBL, the company must enter into a formal insolvency procedure, as it is an unsecured debt and will be repaid after the company’s secured and preferential creditors. Any remaining unsecured debts the company has at this point will be written off

The BBLs were 100% backed by the government so lenders will look to them for repayment, in the event of a company entering liquidation with an unpaid Bounce Back Loan.

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