Help for Directors

All businesses face the occasional financial crisis but when they become a critical problem you need to know exactly where you stand. In our help for directors section, you will find specific information for answering your questions around if you are insolvent, what you need to do if you are and how it will affect you.

Creditors Liquidation

What is known as Creditors Voluntary Liquidation is the process that most businesses must go through if they are insolvent. It can be a difficult time for everyone involved, so we have created this special section of our site to give you the important facts about CVLs in a clear and down to earth way so you can see where you stand.

Members Voluntary Liquidation

This is when your company is still solvent, but you (and your fellow directors) decide it is time to call it a day and retire or move on to the next stage of your lives.  With an MVL, you will release the assets and use these funds to pay off the creditors before returning the remaining funds to the shareholders.

Bounce Back Loans (BBLsP)

Bounce Back Loans (BBLsP)

The Bounce Back Loan offer was seen as a lifeline for many businesses and they certainly provided a much-needed injection of cash. Now they have come due for payment and for many businesses they have done so before the company had fully recovered from the effects of the pandemic. For some, they are now another burden on a business that is already struggling financially and for others, they are the catalyst for seriously considering insolvency.

Although many people considered them as being 'free money' with a cast-iron guarantee that the government would pay them, the truth is somewhat different.

These are the most common questions we are being asked about BBLs

Struggling to pay your Bounce Back Loan

If you are having problems paying your bounce back loan there are various options available to you that may help you in the short term. The banks have agreed put in place a series of what are known as 'Pay as you Grow Options' and with these you can:

·       Extend the length of the loan from 6 to 10 years

·       Make interest-only payments for 6 months

·       Pause payments entirely for up to 6 months

To take up one of these options, you will need to contact your bank.

These may seem like generous options but they do come with a warning in some cases and all of them could just be delaying the problem and not solving it. Before you make a decision we suggest you click here for a more complete discussion of these options 

What happens if you cannot pay your Bounce Back Loan

If you find you are in a situation where you cannot currently pay back your BBL and the options offered to help in the short term are not going to help you pay the loan in the long run, then you may well be looking at insolvency. 

In a situation of insolvency, the Bounce Back Loan repayment may well be covered by the initial terms of the BBL loan conditions and revert back to the government for payment. However, this is not quite as cut and dried as it would initially seem. Firstly, the banks will look to obtain payment before anything else is considered, and secondly, and more importantly, there are several ways in which the initial terms of the loan may apply.

If you are looking at insolvency and have a BBL then you really do need to seek advice. We have seen a considerable number of cases where the Directors of a business could end up being liable for the loan. For more information on the ins and outs of BBLs and insolvency click here

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If you think your business may be insolvent it is important to get help as soon as possible

Call us for a free initial discussion 

Leicester: 0116 232 5117 | Warwick: 01926 671 891 | Coventry: 02476 017 639 | Northampton: 01604 263 179