Bounce back loan and debt to a director

butcher1892

Very quick question, can a bounce back loan be used to repay money the business borrowed from a director, I'm guess not, but thought I'd ask anyway.
Many thanks

dunstonh

Yes, as long as the company is not wrongful trading or trading insolvent.  (although the Govt is looking at relaxing these during the support period for businesses that were viable before CV and tried to carry on but failed. If you know you are going to fail regardless then the answer is no)

Jeremy535897

What can I use the loan for?

The business must confirm to the lender that the loan will only be used to provide an economic benefit to the business, for example providing working capital, and not for personal purposes.

If the business was a “business in difficulty” on 31 December 2019, then a loan under the Scheme is not permitted to be used for export-related activities.

There are no limits on the amount of the facility that can be used for refinancing.

From https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/

davetheraver

LOL, AKA can I just transfer the BBL loan money from my business account to my personal account and pocket the money.

Don't forget it will be needed to be paid back, regardless if you dissolve the company, it wont be that easy, trust me

davetheraver

harryharry305 said:

Most of these loans will be defaulted on

in fact most loans in the world will be defaulted on now, especially sovereign loans

Irresponsible lending, lend to idiots and expect defaults. These people will be banned from being directors or running businesses etc in the future, and forced to work as an employee. good tactic by the government, as it will definitely remove a lot of self employed or small businesses owners.