cherrydeck 05gac Qn0k4 unsplash scaled

What to do if you’re struggling to repay your CBILS or Bounce Back Loan

As the Covid-19 pandemic continues to disrupt the economy, many businesses are facing financial difficulties and struggling to make payments. The government’s coronavirus business loan programs have provided essential financial assistance, but some businesses may still miss a payment or default on a loan.

If your business has missed a Bounce Back Loan or CBILS payment, it is important to understand the potential implications. It is worth noting that if your business borrowed an amount less than £250,000 under CBILS, you are not personally liable in case of a missed payment or loan default. However, if your business debts become unsustainable and you need to dissolve the company, there may be long-term consequences to consider.

Facing short or long-term financial hardship?


While the government provides guarantees of 100% and 80% for CBILS and BBLS loans respectively, it is important to understand that the borrowing business remains liable for the loan payments. If your business misses a payment, you may need to catch up as soon as possible. However, if the missed payment is a sign of deeper financial issues, it is important to take proactive steps to address the situation before it escalates.

To prevent more serious financial problems, you can take several steps such as reviewing your expenses and revenue, seeking advice from financial experts, and restructuring your debt if necessary. By taking these steps, you can ensure that you are able to repay the missed payment(s) and prevent any further defaults.

Get expert insolvency guidance


In the event of financial difficulties, can offer valuable assistance by providing tailored solutions to your specific situation. This could involve exploring cost-cutting options to reduce expenses, or implementing more formal measures to guard against legal action from creditors.

If your business has missed a Bounce Back Loan or CBILS payment, it is crucial to seek professional help to assess the overall stability and health of your business. This will help to identify any underlying problems and provide a roadmap for addressing them. By taking this first step, you can ensure that you are able to effectively manage your finances and protect your business from future financial difficulties.

Assistance for businesses who missed a Covid-19 loan repayment


Securing additional finance can provide the necessary cash flow support to get your business back on track. For instance, if your sales are generally strong, you can consider invoice finance to meet both your coronavirus loan and other financial obligations.

The HMRC Time to Pay scheme is available for eligible businesses that have fallen behind on their taxes. This allows you to repay tax arrears over a period of 3-6 months through a structured instalment plan.

For businesses facing more severe financial difficulties, formal insolvency solutions, such as a Company Voluntary Arrangement (CVA) or company administration, can provide a path to recovery or protect the business until cash flow improves. These options can help to stabilise your finances and get your business back on track.

Could missing a payment lead to liquidation for your Bounce Back Loan or CBILS loan?


In some cases, missing a loan repayment may be a sign of deeper financial difficulties leading to liquidation. However, if you have only missed one or two payments and are able to keep up with other bills, the company may not be considered insolvent. As a director, it is your legal obligation to stay informed of the company’s financial situation at all times, to protect creditors and to prevent you from trading while insolvent.

If the business continues to decline, liquidation may be the only option, but our expert team is here to guide you through the process and ensure that you meet your obligations as a director. It’s worth noting that if your company does need to be liquidated in the future, you may be eligible for redundancy pay as an employee.

For more information on director redundancy, or for personalised advice on what happens if you miss a Bounce Back Loan or CBILS payment, our team is here to help. Our network of offices throughout the UK offers free, same-day consultations to help you navigate these complex issues.

× Need help, speak to us.