Lloyds Bounce Back Loan

Paparika

I took a bbl of 10k when it all started, I have a small business at the time, only director, limited company.
Late last year I tried to dissolve the business as I'm no longer trading. The only debt was the bbl.

I contacted the bank to inform them that the company had no money, I had no money.
Due to brexit, covid, ill health and cost of living the company could not carry on.

I was asked could the company pay I said no, they asked if I could pay I said no.
now the bank is demanding all the bbl paid back within 14 days.

I know the government are guarantors for these loans.

I don't own nothing, on ESA and DLA due to illness.
Married.

What do I do, I have worries that they will go after the house which is my husbands, nothing to do with me. 

MEM62

Did you stick to the terms and conditions of the loan?  There were restrictions on what you could use the money for.  They may be pressuring you if they believe the loan was not used correctly.   

Grumpy_chap

I am sorry to hear about your predicament.

AIUI, it is not possible to dissolve a Ltd Co. when that business has unsettled liabilities.

With regard to the BBLS, it is reasonable to expect that the banks would be required to exhaust normal debt recovery processes before being able to claim on the underwriter of last resort (Government guarantor).

The demand for repayment is likely one part of that process.

It is also likely that the bank would seek to verify that the loan was granted in accordance with the rules and that the funds were expended in accordance with the rules of the BBLS.  This was for business benefit and not personal use.

The bank will quite likely look to examine the business financial records and, particularly I would imagine, and loans or drawings taken by the Shareholders / Director in the period relating to the BBLS. 
If the Director owes the Ltd Co any money, then that will need to be repaid by the Director to the business and the business use the funds to repay the BBLS.
If the Ltd Co made any dividend payments, these could only have been from retained profits.  A bank would reasonably ask whether there were sufficient retained profits to support a dividend if there were no funds available to support the loan repayment.

Only after all the normal debt recovery actions have been exhausted would you expect the bank to be able to claim on the Government underwriting.

Paparika

MEM62 said:

Did you stick to the terms and conditions of the loan?  There were restrictions on what you could use the money for.  They may be pressuring you if they believe the loan was not used correctly.   

From what I understand they have to show HMRC that they made every attempt at getting the money back.
I did stick to the t's & c's

Khaderbhai

Grumpy_chap said:

I am sorry to hear about your predicament.

AIUI, it is not possible to dissolve a Ltd Co. when that business has unsettled liabilities.

With regard to the BBLS, it is reasonable to expect that the banks would be required to exhaust normal debt recovery processes before being able to claim on the underwriter of last resort (Government guarantor).

The demand for repayment is likely one part of that process.

It is also likely that the bank would seek to verify that the loan was granted in accordance with the rules and that the funds were expended in accordance with the rules of the BBLS.  This was for business benefit and not personal use.

The bank will quite likely look to examine the business financial records and, particularly I would imagine, and loans or drawings taken by the Shareholders / Director in the period relating to the BBLS. 
If the Director owes the Ltd Co any money, then that will need to be repaid by the Director to the business and the business use the funds to repay the BBLS.
If the Ltd Co made any dividend payments, these could only have been from retained profits.  A bank would reasonably ask whether there were sufficient retained profits to support a dividend if there were no funds available to support the loan repayment.

Only after all the normal debt recovery actions have been exhausted would you expect the bank to be able to claim on the Government underwriting.

Is this always true? I have seen it before where a company had liabilities and then magically is dissolved a week or two later. 

macman

What happened to the £10k you borrowed? How soon after that did the company cease trading? To borrow £10k you must have been turning over at least £40k pa.
The bank cannot come after assets owned solely by your wife.