What to do if you’re worried about paying back your bounce back loan
Repayments of Bounce Back Loans are to start in the next few months, here is what to do if you are worried about how you’re going to start repaying the loan.
Tips if you can’t pay your bounce back loan
You can request to have an additional 6 months before you start paying back the loan, this means you have 18 months before paying it off. Interest will kick in at 12 months though so the earlier you start paying it the less interest you’ll have to pay.
The loans can now be restructured over 10 years as opposed to 6. This should reduce your monthly payments by nearly half and help your cash flow if you need it. You will pay more interest though over the term of the loan.
Your lender should have emailed you about the above options.
You can move to interest-only 3 times during the term of the loan and each time it can last for 6 months
You can take a 6-month payment holiday once during the loan, remember this can be taken straight away or at any time during the term.
If you are worried about how your business is going to pay the bounce-back loan back it’s a good idea to seek independent advice early.
Lots of directors who have not spent the bounce-back loan in the correct way could face claims for overdrawn director’s loans, misfeasance, and preference payments if they end up in an insolvency position. All these scenarios can have serious implications for the director where they may be asked to pay some or all of the BBL back by the liquidator.
The longer you leave this situation the fewer options are available to you.
Please ask any questions or if you would prefer send me a DM.
All the best,
1st Business Rescue