BBL - Directors Loan - Bank closing my account and asking for full immediate repayment

nath234

I took BBL loan in May 2020 for my limited company and in September the bank came back to me asking for my full income for the previous year and the way I have spend the loan. For which I replied to them that I will be happy to provide them with the accounts as soon as mine is ready and later I provided them with the accounts I submitted to HMRC for the period 2019-2020. They opened a fraud investigation and closed my banking facilities (business and personal)  because I transferred some of the funds to my personal account from my Business account. I very much tried telling them that after paying some HMRC bills and my salary I have taken a directors loan as well which I will be paying back within the nine months period after the end of the financial year of 2020-2021. And I also told them that I am aware of the personal tax implications if I don't pay it back to my company within that period. But they are insisting on paying the whole amount back straight away or else they will be passing it to debt collectors and put a marker under CIFAS. This will definitely put my company in distress. I have no idea what to do now any help/advice is appreciated. 

Thrugelmir

Was the BBL used for personal uses?  

Grumpy_chap

Did the OP receive a BBLS into their Ltd Co., and then make a loan to the OP (as Director)?  That is what it sounds like from the post.

I don't think that complies with the purposes of the BBLS scheme - to support the business needs.  What did the business gain by making a loan to the Director?

There are ways that the Ltd Co could legitimately transfer BBLS funds to the Director - the most obvious being to maintain the normal salary payments to the Director.

Based upon the information shared, the OP appears to have pushed the boundaries of the BBLS scheme and the action by the bank seems reasonable.  In that case, the best thing the OP can do is pay the money back to the Ltd Co so that the Ltd Co can reimburse the bank.  This might allow Barclays to reconsider the penalty actions and closure.

If the above is not the situation, then the OP needs to clarify.

sheramber

 It  reads like the OP took his salary and then a director's loan.
 I very much tried telling them that after paying some HMRC bills and my salary I have taken a directors loan as well which 

Jonesy1977

The Bounce Back Loan was given on the basic premise that "The loan will not be used for personal purposes but as an economic benefit for the business".  Terms and conditions vary but the OP will have signed (and read) them.  If they have not read them then I suggest they do.......