Unable to repay Bounce Back Loan (BBL) - A guide for UK Companies

Struggling to Repay BBL

Struggling to repay your Bounce Back Loan (BBL)? If you're a UK based business taking advantage of the government’s Coronavirus support package, it can be difficult to know what to do when the repayment period begins. Repaying the BBL is an important part of managing financial wellbeing, as it helps protect businesses from long-term debt. This guide provides helpful advice on how to manage a BBL if you are unable to repay it in full.

First, review your finances and check that there isn’t any other way for you to cover the payments. Consider restructuring existing debts or negotiating with creditors for more flexible payment terms. However, if this isn't possible, contact your lender and explain why you are struggling financially.

Eligibility Criteria

Eligibility Criteria is a key factor to consider when taking out a Bounce Back Loan (BBL). The UK Government has set out strict criteria for businesses to meet in order to be eligible for the BBL scheme. It is important that companies understand the requirements before deciding whether or not they should apply for a loan.

To be eligible, businesses must have been established by 1 March 2020 and have been adversely impacted by the coronavirus pandemic. Companies must also meet specific criteria such as having turnover of no more than £45million and a balance sheet total of no more than £45million. Businesses must also demonstrate that they are not 'undertaking activities' with links to illegal activity, tax evasion or avoidance schemes and money laundering activities.

Understanding the Terms of Loan

A Bounce Back Loan (BBL) provides UK companies with the financial assistance they need to stay afloat during the pandemic. However, when taking out such a loan, it is important to understand all of the terms and conditions that come with it. Knowing what you are signing up for can make all the difference when it comes to successfully managing your repayments.

The terms of a BBL loan will vary depending on which lender you choose and how long you are borrowing for. Generally speaking, interest rates tend to be higher than other types of loans due to the government guaranteeing them. You should also take into consideration fees and charges associated with your loan as well as any additional costs that may arise from late payments or missed repayments. Additionally, if you wish to pay off your loan early there may be an early repayment fee attached so check this before applying for a BBL.

Repayment Options Available

The Bounce Back Loan (BBL) scheme was introduced by the UK government in 2020 to provide quick and easy access to funds for small businesses affected by the COVID-19 pandemic. Unfortunately, some companies have found themselves unable to repay these loans, so this article will explain repayment options available.

The first and most important step is to contact your lender as soon as possible if you are struggling with BBL repayments. Most lenders understand the difficult situation businesses are facing and they may be able to support you with short-term solutions such as payment holidays or reduced payments.

Another option is restructuring the loan – either extending the term of the loan or switching from a capital repayment loan to an interest only loan.

Manage Cashflow to Repay Loan

The Bounce Back Loan scheme has been an invaluable lifeline for UK companies struggling to survive the effects of the coronavirus pandemic. However, with repayment periods starting from 6 months and repayments due from April 2021, many companies are now facing difficulties in repaying the loan. This article provides a guide for UK companies on how to manage cashflow in order to repay their Bounce Back Loans (BBL).

Cashflow is a crucial element of any business, and businesses must remain vigilant when it comes to managing their finances. Companies should monitor their income and expenditure closely and keep track of their cashflow through monthly or quarterly forecasting. It is also important to identify cost-saving opportunities within the business; this could involve reducing staffing costs or renegotiating supplier contracts.

Seek Professional Advice

Seeking professional advice is one of the most important steps a UK company should take when unable to repay its Bounce Back Loan (BBL). The BBL scheme was established by the government to help small businesses and self-employed people manage their finances during the coronavirus pandemic. Unfortunately, many companies have found themselves unable to repay their loan in full or are struggling with repayment schedules. For those in this situation, seeking professional advice is key for navigating this complicated process.

The first step for any business facing difficulties repaying a BBL loan is to contact their lender as soon as possible. After speaking directly with them, businesses may want to consider consulting a professional advisor who can provide specific guidance tailored to their individual needs and circumstances.

Conclusion: Find the Right Solution

The COVID-19 pandemic has caused much financial hardship for UK companies, and many have taken out a Bounce Back Loan (BBL) to provide them with much needed funds. This article provided a guide for those companies who are unable to repay their loans, discussing the available options and what steps they can take to find the right solution.

Ultimately, there is no one size fits all solution when it comes to finding relief from BBLs; the best approach depends on the individual company's circumstances. Companies should assess their options carefully and consider both short term solutions such as payment holidays or rescheduling payments, as well as longer term strategies such as refinancing or equity fundraising. If a company decides that none of these options are suitable then insolvency may be an option to explore further; this should only be considered after taking professional advice from experienced advisors.