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What was the Bounce Back Loan Scheme (BBLS)?

The Bounce Back Loan scheme was a Government funded program which granted funds to UK companies to help them overcome hurdles brought about during the COVID-19 pandemic and the nationwide restrictions imposed. An alternative to the Coronavirus Business Interruptions Loan Scheme (CBILS) the BBL scheme was more widely available to companies.

Aimed at rescuing SME’s this scheme entitled eligible businesses to a loan of up to 25% of their turnover with an upper threshold of £50,000. These loans were interest free for the first 12 months and backed with government security for the complete amount, giving lenders more faith in troubling times.

The scheme was open to applicants until 31st March 2021 and lenders were able to top up previous BBLs had they not borrowed the full amount entitled to them.

Despite these loans, businesses have still struggled immensely with the fall-out from the COVID-19 restrictions in place throughout the UK. Many businesses are realizing that even with this help, their businesses are unlikely to survive or are still struggling to maintain their financial obligations.

Due to this, our team have noticed an increasing number of business requesting advice regarding these BBLs.

So, what does this mean for businesses?

Can I close my company if we have accessed BBLs?

Although interest free for 12 months, BBLs are still in fact debt and a company must understand this in order to legally and appropriately close their company with outstanding arrears. Unlike other forms of debt, BBLs never required a personal guarantee, which prevents creditors from exercising options such as repossession but this doesn’t stop these loans as being regarded as company debts when it comes to closure.

In the case of companies wishing to close with unpaid BBLs, voluntary Liquidation is the most appropriate method of dissolving the business while amending any outstanding arrears.

Can I Strike-off or Dissolve my Company with outstanding BBL debts?

In short, no.

If a company simply attempts to cease trading and dissolve, without addressing their remaining debts they will be stopped. Companies House will recognize the outstanding debt and issue an ‘Objection to Company Strike Off Notice’, which details their investigation into your decision to initiate this process.

HMRC are often involved in this process as they liaise closely with Companies House in order to detect companies attempting to use dissolution as a tax avoidance tactic. However, BBLs and any outstanding debts associated with these often face objection by the finance providers themselves. Prior to instigating the dissolution process, Directors are legally required to inform creditors, which means that these providers will be aware of the company’s desire to dissolve and likely object ahead of application or shortly thereafter.


In the unlikely event that a company has successfully dissolved outside of the appropriate procedures HMRC has the powers to reinstate the company, upon evidence they possess.

How can I close a Company with BBL Debt?

Much like the closure of any company with outstanding debts the most appropriate procedures to consider are Voluntary Liquidations. This enables the company to close under the correct procedures while simultaneously settling any outstanding arrears.

Whatever form of Voluntary Liquidation your company is considering you will require the assistance of a licensed Insolvency Practitioner. They will act on behalf of the company, managing the liquidation process, identifying the outstanding creditors and assessing their priority as a creditor. They will liquidate the business, selling any assets and distributing the funds amongst the creditors identified.

As long as the company has traded for a minimum of 2 years, you may be eligible to apply for Directors Redundancy payments under the HMRC scheme. These can help ease funding concerns and alleviate further financial anxiety.

If you are concerned about the financial state of your company and considering liquidation, please get in touch with a member of our team. We can offer practical guidance on the options available to you and help ease these concerns and the stresses associated with them.