Bounce Back Loan - 'Event of Default'/ Demand for Repayment in Full

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?

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  • Grumpy_chap
    Grumpy_chap Posts: 14,392
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    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
    sourcrates Posts: 28,522
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    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.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Nebulous2
    Nebulous2 Posts: 5,063
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    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
    artyboy Posts: 803
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    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
    macman Posts: 52,955
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    OP hasn't stated if this is a BBL to a ltd company , or a sole trader?
    No free lunch, and no free laptop ;)
  • I had similar problem natwest full bounce back loan £54000 defaulted unable to repay. I  am in touch with recoveries team as I have health problems and cant work. I asked about the government guarantee and the lady said the recoveries process can take 10 years?! Anyone any experience of similar defaults and how long they will keep chasing before calling on the government guarantees? 
  • Grumpy_chap
    Grumpy_chap Posts: 14,392
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    bipp2009 said:
    I had similar problem natwest full bounce back loan £54000 defaulted unable to repay. I  am in touch with recoveries team as I have health problems and cant work. I asked about the government guarantee and the lady said the recoveries process can take 10 years?! Anyone any experience of similar defaults and how long they will keep chasing before calling on the government guarantees? 
    It does seem appropriate that the banks have to pursue all the standard debt recovery processes first before the Government guarantee can be called upon.

    Have you explored any of the flexible options that are now available with the BBLS scheme?
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