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BOUNCE BACK LOANS

What Is A Bounce Back Loan?

 The Bounce Back Loan Scheme was an initiative introduced by the government to help small and medium-sized businesses affected by the coronavirus crisis to secure loans of up to £50,000.
The scheme closed on 31st March 2021.
 
Click for more details on BBL's ..... CLICK. 

What If I Get Into Difficulties Or Dispute The Terms Of The Agreement?

A Bounce Back Loan is an unsecured debt, as the Bounce Back Loan is secured by the Government, the lender will pursue the Government for repayment in full, should a borrower compliantly default. If you are disputing your BBL then you may raise a complaint and claim against the lender. A first complaint and claim around the initial amount borrowed and associated terms, then a second complaint around any "top-up" of that loan that was later actioned.

 

What Can I Use My Bounce Back Loan For?

The government has made it clear that you can use a BBL loan to support your income. However, you can't use it to pay dividends (unless there is a profit on your balance sheet but you don't have the cash to pay it out as a dividend). You can use it to pay salaries, but not to increase them.
 

Who Is Responsible For Paying Back The Bounce Back Loan?

Bounce Back Loans and Personal Guarantees: Understanding your liability.

The government is providing 100% security to the banks for loans taken out under the BBL (Although some customers have indicated confusion surrounding this point), however, it is the responsibility of the business to pay back the loan once monthly repayments begin following the initial 12-month grace period.

There are a number of repayment options offered by the government under the PAYG process, allowing for an (i) extended loan period and (ii) reduced payments, allowing for businesses to recover from the pandemic over a longer period and with potentially reduced monthly payments for a set period of time.

 

Missold Bounce Back Loans.

When the government implemented the Bounce Back Loans and Coronavirus Business Interruption Loans, it specifically legislated (s.12 of the Business and Planning Act 2020) to prevent challenges to the loans based upon consumer credit legislation.

It did so on the basis that the loans were needed urgently and in large numbers so usual consumer protections should not apply.
 
However the right to challenge the loans under English common law remains, and the government expressly made it clear that the Financial Conduct Authority rules and the Financial Ombudsman Scheme would continue to apply, as would the Lending Standards Board’s standards of lending practice.

 

The Government Backed the BBL's For Lenders Not Borrowers.

Many people took out their loans on the express understanding that the government would stand behind them if they could not afford to repay their loans.

In fact, the guarantee is not to customers it is a guarantee to the lending banks, who are making 2.5% or more interest on these loans with no risk whatsoever.

The banks did not do enough to highlight the risk to borrowers. The banks have a clear conflict of interest between their customers and their guarantor, the UK Government.