Bounce Back Loan-BBLS Debt Management
The Bounce Back Loan Scheme (BBLS) was introduced to help small and medium-sized businesses during financial difficulties caused by the COVID-19 pandemic. However, as repayment obligations arise, many businesses are struggling to manage their Bounce Back Loan debt. If you’re finding it difficult to repay, there are several solutions to help you manage this debt effectively.
Key Features of the Bounce Back Loan Scheme
• Loans up to £50,000, capped at 25% of turnover.
• Fixed 2.5% interest rate after the first 12 months.
• Helps improve cash flow without taking drastic measures.
Challenges Businesses Face with Bounce Back Loans
• Reduced cash flow due to rising operational costs.
• Slower-than-expected recovery after the pandemic.
• Difficulty meeting monthly repayments, especially if other debts are also outstanding.
Bounce Back Loan Debt Management Solutions
1) Pay As You Grow (PAYG) Options
The PAYG scheme offers flexible options to make repayments more manageable:
Extend Loan Term: Increase the repayment period from 6 years to 10 years, reducing monthly payments.
Interest-Only Payments: Pay only the interest for up to 6 months (can be used up to 3 times during the loan term).
Repayment Holiday: Take a 6-month break from repayments, available once during the loan term.
2) Debt Consoldation
If you have multiple debts, consolidating them into one loan can simplify your finances.
• Combine the Bounce Back Loan with other business debts into a single, manageable monthly payment.
• May reduce overall interest rates and improve cash flow.
3) Company Voluntary Arrangement (CVA)
A CVA is a formal agreement with creditors, including Bounce Back Loan lenders, to repay a portion of your debts over time.
• Suitable for businesses with long-term viability but short-term cash flow challenges.
• Allows you to keep trading while restructuring debts.
• Halts creditor pressure and legal action.
4) Administration
If your business is insolvent but has potential for recovery, entering administration can provide protection while restructuring debts and operations.
• Prevents enforcement actions while an insolvency practitioner assesses the business’s future.
5) Liquidation
If your business is no longer viable, liquidation may be the best option.
• Creditors’ Voluntary Liquidation (CVL): A structured closure process where assets are sold to repay creditors.
• Bounce Back Loans are considered unsecured debts, meaning they are written off if there are insufficient assets to cover repayment.
Understanding Director Responsibilities
Bounce Back Loans are unsecured and backed by the UK government. However:
• If your business cannot repay, you are not personally liable unless there has been fraud or misuse of funds.
• Directors must ensure proper record-keeping and demonstrate the loan was used for legitimate business purposes.
When to Seek Help
Signs you may need professional advice include:
• Struggling to meet monthly repayments.
• Falling behind on other business debts.
• Receiving letters or calls from creditors.
• Concerns about cash flow and the long-term viability of your business.
How We Can Help
At Acme Credit Consultants, we specialize in supporting businesses with Bounce Back Loan debt management and other financial credit commitments like business loan from Funding circle, IWOCA, Swish fund, Fleximize and other business loan lenders.
Financial Assessment: Review your situation and explore the most suitable options.
Negotiation: Work with lenders to restructure or reduce repayments.
Debt Solutions: Advise on CVAs, administration, or liquidation if necessary.
Ongoing Support: Help you implement strategies to regain control of your finances.
Contact Us for Expert Guidance
Don’t let Bounce Back Loan debt overwhelm your business. Speak to our experienced advisors for confidential, no-obligation advice tailored to your circumstances.
Call us now: 0208 568 9687
Email us: debt@acmecredit.co.uk
Website: www.acmecredit.co.uk
Visit Us: Acme House, 136 High Street, West Drayton, Middlesex UB7 7BD