This article helps you decide what really happens if you cannot pay a Bounce Back Loan and what lawful options exist. It explains lender support, Pay As You Grow choices, and when personal liability can arise. Clear steps will show how to talk to your bank and what records to gather. You will also see the difference between strike-off and liquidation. With that map in mind, let’s answer the big question first.

Can you really walk away from a Bounce Back Loan?

You cannot simply walk away from a Bounce Back Loan because the company remains liable for the debt until it is repaid or dealt with through a proper process. The loans did not usually require personal guarantees, but directors can still face issues if funds were misused. If a company is insolvent, you must follow the correct route and treat all creditors fairly. Quietly ignoring payments risks extra charges and formal action. Knowing that, the next step is to try to get help from the lender.

What help can your lender offer today through Pay As You Grow?

Your lender can offer Pay As You Grow options such as term extension, interest-only periods, or a short repayment holiday. These choices can lower the monthly payment and give breathing space. You should call early, explain cash flow, and pick the option that fits incoming receipts. Keep a note of dates, names, and the plan you agreed on. If the gap remains, cash-flow fixes can help for a while.

What quick steps can reduce pressure before the next repayment?

You can trim costs, chase late invoices, and move small deposits forward to cover the next repayment. Short forecasts for thirteen weeks make gaps visible and easier to manage. Send simple payment links to speed receipts and keep updates polite and brief. Avoid new non-essential spending until the plan holds. If payments are still failing, you must consider the company’s solvency.

What happens if the company is insolvent and cannot pay the BBL?

If the company is insolvent and cannot pay, directors have duties to protect creditors and avoid worsening the position. You should stop taking drawings, keep records tidy, and seek formal advice from a licensed professional. A Creditors’ Voluntary Liquidation may be the correct route when rescue is not realistic. Honest books and calm steps reduce risk for directors. Before choosing a route, understand personal liability concerns.

Are directors personally liable for a Bounce Back Loan?

Directors are not usually personally liable for a Bounce Back Loan because personal guarantees were typically not taken. Personal risk can still arise where there is fraud, misuse of funds, or unlawful dividends. Overdrawn director’s loan accounts can create problems if company money is treated like personal cash. Good records and clear business use help demonstrate proper conduct. With risk points understood, many ask about dissolving the company.

Can you strike off a company that still owes a Bounce Back Loan?

You should not try to strike off a company that owes a Bounce Back Loan because creditors can object, and the attempt may trigger an investigation. Outstanding debts normally require a formal insolvency process rather than a simple dissolution. Trying to close without dealing with the loan can lead to questions about conduct. A proper liquidation deals with assets, creditors, and reports in a clear way. If you’re unsure, compare the routes calmly.

What is the difference between strike-off and liquidation?

Strike-off is an administrative removal for clear, settled companies, while liquidation is a formal process that handles debts and assets. Liquidation involves a licensed practitioner who informs creditors and reports on the director’s conduct. This route can close a company that cannot pay its debts in an orderly way. Strike-off is not designed for insolvent companies with live creditors. With the route clarified, keep your paperwork tight.

What records should you keep to protect your position?

You should keep bank statements, invoices, receipts, payroll records, and notes showing how the Bounce Back Loan was used. Board minutes and short emails that explain key decisions are helpful. A timeline of cash movements and reasons for choices adds context. Store files by month so questions are easy to answer. Once the records are safe, speak to your bank in the right way.

How should you talk to the bank if you are falling behind?

You should talk to the bank early, be honest about the figures, and propose a simple plan based on real cash flow. Ask for Pay As You Grow options and confirm everything in writing. Avoid promises you cannot keep, and do not hide missed payments. Keep every reference number and letter in one folder. After speaking to the bank, watch out for common mistakes.

What mistakes should directors avoid right now?

You should avoid taking new drawings, paying one favourite supplier only, or moving assets out of the company. Do not mix personal and business spending, and do not delete or rewrite records. Avoid a strike-off when debts remain because it rarely ends well. Keep calm, document choices, and seek formal advice when needed. When the dust settles, it helps to plan for next quarter.

How will a Bounce Back Loan issue affect your credit and banking?

A problem with the loan can affect the company’s credit score, banking terms, and access to new finance. Personal credit may be touched where joint products or guarantees exist, but that is less common with BBLs. Banks look for steady conduct, clear records, and early contact. Keeping accounts tidy and paying something shows intent. If closure is required, choose a clean route.

What options exist if the business cannot be saved?

Options include a Company Voluntary Liquidation to close, or Administration, where rescue might work. A planned closure handles creditors fairly and reduces director stress. Once complete, you can start again properly with fresh books and lessons learned, including applying practical steps like these last-minute VAT payment tips. Personal liability is unlikely where behaviour was honest and records are clear. With options set out, let’s pull the threads together.

What is the practical answer to “Can you walk away?”

The practical answer is that you cannot just walk away, but you can choose lawful steps that protect you and treat creditors fairly. Start with your lender, and stabilise cash flow for the short term. If insolvency is clear, use a proper process rather than a risky strike-off. Keep records, avoid preferences, and stop drawings until a plan is agreed upon. With early contact, clean conduct, and guidance from our finance professionals, you reduce risk and move forward in the right way.