Bounce Back Loan - 'Event of Default'/ Demand for Repayment in Full 15 September 2022 at 2:08PM in Loans 5 replies 641 views

Sispone

Letter received from business banking requesting full amount of bounce back loan be repaid immediately due to an 'event of default' .  An 'event of default' apparently is not the same as a default on a repayment. We haven't defaulted on a repayment, every payment and interest has been paid on time. Have the bank have changed their terms of the loan?  When they 'reserve the right to withdraw their contract at any time'  is this what they have done?   Called the bank, they can't explain, they are just demanding repayment, in full today, £40k. Does anyone have any experience of this or had a similar letter and know what we can do?

Grumpy_chap

Sispone said:

Letter received from business banking requesting full amount of bounce back loan be repaid immediately due to an 'event of default' .  An 'event of default' apparently is not the same as a default on a repayment. We haven't defaulted on a repayment, every payment and interest has been paid on time. Have the bank have changed their terms of the loan?  When they 'reserve the right to withdraw their contract at any time'  is this what they have done?   Called the bank, they can't explain, they are just demanding repayment, in full today, £40k. Does anyone have any experience of this or had a similar letter and know what we can do?

That is an unusual phrase "event of default".
Is it possible that the bank think some part of the application for, or the management / use of, the BBLS is outside the BBLS rules?

sourcrates

Never heard of it personally, however, no matter how they choose to term it, they can "demand" whatever they want, the only way to enforce payment is through the courts, same as everyone else.

I suspect the Bank will simply resort to the debt collection process if said full repayment is not forthcoming, the same as any other debt would be handled.

Nebulous2

I haven't visited for some time, but there were some bounce back loan experts on the coronavirus support boards. It might be worth posting there. 

artyboy

Although I wouldn't suggest anyone relies on Wikipedia for legal advice, 'event of default' is a fairly standard term in contracts and here's a layman's explanation

https://en.m.wikipedia.org/wiki/Event_of_default

The point being, this should be defined within whatever BBL contractual documents you signed. If the bank is not specifying what precise event is leading to them attempting to terminate the contract, you need to ask them!

macman

OP hasn't stated if this is a BBL to a ltd company , or a sole trader?