Bounce Back Loans & Closed Business

BigSR

I'm a sole trader and due to covid, I've now decided to close my business and return to full time employment. During Covid I applied for and received a 10k BBL. I have about 8k left to pay. What are my options? Do I still need to pay this off or is it written off? Someone mentioned to me to go Ltd and then close my business down to get out of the BBL.  Surely it cant be that simple, otherwise the world would have gone mad for BBL loans during covid and done exactly that. I thought I would ask you guys as I know it cant be that simple. Thanks in advance.

molerat

No it is not that simple. As a sole trader, and not a limited company, you are personally responsible for the loan.  Even if you now set up your business as a limited company it will not be responsible for your previously incurred personal debt. It will not get written off and the bank is likely to start debt recovery or insolvency proceedings if you stop paying.  There are options to delay payments if you are struggling.

tifo

BigSR said:

world would have gone mad for BBL loans during covid

 They did  ....

mattyprice4004

Whoever told you that doesn’t know their… bottom from their elbow. 

You’re personally liable as a sole trader 

macman

BBL loans were underwritten by the govt, so any unpaid debts are borne by the taxpayer, not by the lender.

onashoestring

https://www.gov.uk/government/publications/fact-sheet-bounce-back-loans/fact-sheet-bounce-back-loans

“1. Bounce Back loans must be repaid

The money lent to your company under the Bounce Back loan scheme must be paid back, over 6 or 10 years, with payments starting 12 months after your company receives the loan.

If the money your company borrowed is not repaid, your company may be investigated by the Insolvency Service, even if it has been dissolved.”

tifo

mattyprice4004 said:

Whoever told you that doesn’t know their… bottom from their elbow. 

You’re personally liable as a sole trader 

If the govt doesn't repay your loan because, even for sole traders, it was underwritten by them, then what was the point of saying so? Should've just said only limited companies bounce back loans will be underwritten.

tifo

onashoestring said:

https://www.gov.uk/government/publications/fact-sheet-bounce-back-loans/fact-sheet-bounce-back-loans

The examples given in 4 - 7 are clear fraud.

There's nothing to say why the loan would not be guaranteed hence repaid for someone who genuinely took out the loan for business but which has not gone as anticipated, for example the current cost of living crisis, including fuel prices and purchase costs, could not be anticipated by anyone 2 years ago.

bipp2009

Does anyone have any experience of bounce back recoveries teams natwest how long before they call on the government guarantee? Once they do will they leave you sole trader alone?

Grumpy_chap

bipp2009 said:

Does anyone have any experience of bounce back recoveries teams natwest how long before they call on the government guarantee? Once they do will they leave you sole trader alone?

It can be expected that the bank will pursue all their standard debt recovery processes and can only call upon the Government underwriting once all those processes have been exhausted.

The processes might include verifying that the funds were expended in accordance with the BBLS scheme rules and also such matters as whether there was at any point any wrongful trading.