Many small businesses signed up for a Bounce Back Loan (BBL) during the pandemic as it was an essential lifeline. Many have been repaying, but others have been putting it off as long as they can. What if you now want to liquidate your business? ...
As the loans are 100% backed by the Government, and no personal guarantees needed to be signed, the directors can be relieved to know they are not personally liable for repaying the loan. Directors are protected with limited liability, meaning their own finances are separate from that of the limited company.
However, if misused, a director can be personally liable for the borrowed money. Misuse of a Bounce Back Loan could potentially include the use of the loan money for tax avoidance, gambling or holiday purposes, use of loan money for personal asset purchases, or loan money being used to pay another loan which has already gone into default.
If you're concerned your company may be in financial difficulty and you're considering a liquidation, the team at Essendon Accounts & Tax are here to give you free, confidential advice. We can recommend an experienced insolvency practitioner.
At the end of the insolvency arrangement, any unsecured debts would be written off. Placing the company into liquidation will result in the formal closure of your company and can offer you a fresh start, free from worrying about the BBLS loan.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.