Bounce back loan and universal credit

lostinspace00

Hi,

If I apply for a bounce back loan does this effect universal credit? 
My business has cost me around £5500 in losses since May last year when I began receiving universal credit. If I apply for a bounce back (I could qualify upto £16000) does this effect universal credit and if so how? 

Thanks for any help. 

MattMattMattUK

lostinspace00 said:

Hi,

If I apply for a bounce back loan does this effect universal credit? 
My business has cost me around £5500 in losses since May last year when I began receiving universal credit. If I apply for a bounce back (I could qualify upto £16000) does this effect universal credit and if so how? 

Thanks for any help. 

Are you a sole trader or a Ltd? Will you be using the £16,000 straight away and if so how much, or will it be sitting in a bank account as savings?

Also, being realistic, you have a few hours left to apply for a BBL and unless your circumstances already have everything perfectly aligned (Business bank account, not personal etc.) then the chances of you getting one are close to zero. Even if everything is perfectly aligned you are probably looking at a 100/1 shot at this moment in time. 

lostinspace00

Thanks Matt. I've applied just in case I'm.accepted. I would probably use around 8k to pay credit off keeping the business going and 4k to marketing and the 4k remainder in my account for the time being.  

Would it make much difference if I kept it all in my account? I thought maybe the 16k savings limit could but be an issue but not sure if it would be classed as savings

lostinspace00

I'm a sole trader 

MattMattMattUK

lostinspace00 said:

Thanks Matt. I've applied just in case I'm.accepted. I would probably use around 8k to pay credit off keeping the business going and 4k to marketing and the 4k remainder in my account for the time being.  

Would it make much difference if I kept it all in my account? I thought maybe the 16k savings limit could but be an issue but not sure if it would be classed as savings

Whether you will be accepted is now down to the bank, how long it will take to get an answer I am not sure they will even tell you at the moment.

I am not totally sure, it might impact the UC savings threshold, but it might not, under UC debts to not net off from savings, you would have to speak to your handler as to specifically how this would be treated. I know for example that savings which exist to pay a tax bill are not counted towards the limit, so it would depend if they allowed you to treat that borrowing in a specific way. Will you also be eligible for the 4th SEISS payment in April as that will have an impact on UC if you revive it.