If you took out a bounce back loan, it is important that you know your rights, and where you stand if you find yourself unable to repay it.

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What is a Bounce Back Loan?

A bounce back loan (BBL) is a type of loan that was introduced by the government as a result of the COVID-19 pandemic. The aim of the loan was to allow companies that had been most affected by the pandemic to better ‘bounce back’.

The scheme was launched in May 2020 and was primarily aimed at those smaller-to-medium sized businesses that had been hit hardest by the loss of trade during the countrywide lockdowns. BBLs were open for new applicants until 31st March 2021.

The loan allowed companies that had been affected to borrow up to 25% of their expected turnover (between £2500-£50,000). It was guaranteed by the government for the first 12 months, to further help boost the nation’s businesses, and 2.5% interest rates per annum were set for the years following.

For a business to be eligible for a bounce back loan, they must have first met a series of strict criteria. These were to ensure that the loan wasn’t being used fraudulently and was only reserved for those companies that truly needed it.

The Bounce Back Loan Scheme Rules

While the business bounce back loan was introduced with the best intentions, strict rules needed to be adhered to in order to qualify. These rules, including how much of your annual revenue is due to trading and when the company was founded, were introduced to discourage ineligible people from applying.

Firms were initially expected to repay their loan within six years, but in September 2020 businesses were afforded the option to repay over a 10 year period. No personal guarantees were needed, meaning an inability to repay would not put personal assets at risk.

In order to be eligible for the business bounce back loan, a company must have been able to confirm the following:

  • That the business had been a UK limited company on or before 1st March 2020.
  • It was not in the process of bankruptcy/liquidation/restructuring
  • Over 50% of its income must have derived from trade
  • The loan would only be used for economic benefit for a registered UK business.
  • Company directors had full and total understanding of the impact failure to repay the loan could have on the business, and on credit rating.
  • The business was not in the public sector, an individual (sole trader’s are eligible), or a bank/insurance company.

HMRC Clamping Down on Bounce Back Loan Fraud

Business bounce back loans were handed out in good faith by the government amidst the biggest hit on UK companies in recent memory. As a result, the loans were guaranteed. However, because of the generous terms of the loan, some were found guilty of taking advantage. This is now something HMRC are now heavily clamping down on.

Anybody found to have applied for and used their business bounce back loan for any reason other than to protect their firm against the financial damage caused by the pandemic could now find themselves in serious trouble.

As a result of the amount of people opting to take advantage of the scheme, severe punishments were brought in and enforced for those found guilty. These include:

  • Major fines
  • Disqualification as a company director
  • Confiscation order of company/personal assets
  • Potential imprisonment

If you as a business owner or director find yourself unsure on how you may have utilised your bounce back loan, it is crucial that you get in touch with a licensed insolvency practitioner as soon as possible to ensure that you are protected should HMRC find anything untoward has happened.

Download Our Fact Sheet

Are you the director of a company? No matter how successful and secure you may feel now, it’s vital to carefully consider and assess your position when it comes to minimising the threat of potential future personal liability to company debts.

Make sure that your position and financial future are secure against any eventuality. To help, Inquesta has produced a handy fact sheet concerning avoiding director exposure.

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What to Do if You Are Struggling with Bounce Back Loan Repayment

Bounce back loans were introduced to give struggling companies a lifeline to protect themselves from the financial struggle of the pandemic. However, some businesses were hit harder than others and found themselves unable to pay. So what next? Fortunately, from pay as you grow to insolvency, there are options available.

Some of the key options available to any business struggling with bounce back loan repayment are as follows:

How Inquesta Can Help with the COVID Bounce Back Loan

Inquesta possesses a specialist team of licensed insolvency practitioners, liquidators, and forensic accountants ready to provide your business with whatever service you could need.

With decades of experience, we will do everything we can to help your company get back on track. Using our expertise, we will guide you through the entire process

The best interests of our clients come first in everything we do — from start to finish you can guarantee that we are working to help you, in the most-stress free and efficient way possible.

We understand that bounce back loans were taken out by businesses during difficult and stressful times, and we want to help make sure that the difficulty and stress disappears.

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Our Specialist Team

We have put together an expert team that can deal with all your bounce back loan queries.


Steven Wiseglass

Director of Insolvency

A co-founder of Inquesta, Steven is a licensed Insolvency Practitioner with over a decade of experience in the field. He is a member of the Insolvency Practitioners Association, Association of Business Recovery Professionals (R3), and his insolvency licence is issued by the Insolvency Practitioners Association. In addition, he sits on the R3 committee of the North West Regional Committee.

Steven specialises in advising directors of small to medium-sized businesses, and has a wealth of expertise in providing the most appropriate advice whatever the firm’s circumstances may be. He has also been instrumental in helping company directors save their business and rebuild them into successful enterprises.



A company cannot be eligible for a second bounce back loan. Should a business be found to have received two bounce back loans, an investigation will take place to determine the extent of wrongdoing and misconduct. It is possible for official sanctions to take place due to bounce back loan fraud.

The repayment period for a business who has taken out a bounce back loan is officially six years — meaning that payments will take place regularly until the period is up and the loan (including interest has been repaid). However, the government extended this period to up to ten years for any businesses struggling to keep up with the repayments.

As a result of the severity of the financial issues facing companies, in 2020 the Chancellor announced the Pay as You Grow scheme for struggling companies. This extended the loan length from six to ten years, the option for interest-only payments for three six month periods, as well as the option for one repayment holiday of up to six months during the repayment period.

If you still cannot repay your bounce back loan there are certain measures you may wish to consider, these include:

  • Company Voluntary Arrangement
  • Administration
  • Liquidation

For further advice or assistance it is recommended that you contact a licensed insolvency practitioner as soon as possible.

Also in Company Insolvency & Recovery


Business Recovery

Company Voluntary Arrangement



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Statutory Demand

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