Five years on: Bournemouth-based Insolvency Practitioners Antony Batty & Company look at what happens if local businesses are struggling now to repay Bounce Back Loans
With the recent fifth anniversary of the first COVID-19 lockdown, local businesses are reflecting on how things changed almost overnight and the financial measures that helped plenty of them weather those uncertain times. Among the most significant was the Bounce Back Loan (BBL) scheme, introduced by the UK Government in May 2020. While these loans provided a crucial lifeline for many, for some businesses, the journey of repayment continues to be challenging.
Elaine Wilkins, director at the Bournemouth office of Antony Batty and Company, Licensed Insolvency Practitioners, shares her insights on the ongoing effects of BBLs for business owners.
“The Bounce Back Loan scheme was a vital support during the pandemic, but five years on, we are seeing many local businesses struggling to meet repayment obligations. It’s essential for directors in this position to act promptly and seek professional advice rather than delay and risk further complications.”
According to the latest government figures, over 1.4 million businesses accessed a total of £46 billion through the BBL scheme. While approximately 70% of these loans are now either fully repaid or on track to be repaid, nearly 30% of businesses have encountered difficulties. This includes those in arrears, default, or whose loans have been settled by the Government Guarantee following liquidation or financial hardship.
For business owners facing repayment challenges, there are options available. The Government introduced the Pay As You Grow (PAYG) scheme to assist borrowers. This initiative offers measures such as extending the loan term to 10 years, payment holidays, or periods of reduced interest-only payments. Statistics show that over a third of BBL recipients have used at least one of these lifelines.
Wilkins emphasises the importance of proactive engagement.
“We frequently work with business owners who are navigating tough financial situations. The key is to explore solutions like restructuring or formal turnaround procedures, such as Administration or a Company Voluntary Arrangement, before considering liquidation as a last resort. Transparency and early action can make a significant difference.”
It is also crucial to address concerns around liability. Directors of companies that were unable to repay their BBLs typically aren’t held personally responsible, provided the loans were obtained and used legitimately. However, cases involving fraud or misuse have led to serious consequences, including director disqualification and, in some instances, criminal charges. Government figures from 2023/24 show that over 800 directors were disqualified for abusing the BBL scheme.
Antony Batty and Company continues to support local business owners, offering professional advice and guidance to navigate financial challenges.
Wilkins concludes:
“These are tough times for many businesses, especially with an outstanding BBL to repay, but with the right support and strategies, it’s possible to find a way forward.”
www.antonybatty.com/location/bournemouth/