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Bounce Back Loans

Will I be personally liable for a Bounce Back Loan if I close my company?

The question I have been asked every working day in 2021 is….

Will I be personally liable for a Bounce Back Loan if I close my company?

The answer

The answer is no – if you are a limited company or a limited liability partnership.  You are not personally liable for the Bounce Back Loan. However sole traders and partnerships (non-LLP) will be personally liable for the Bounce Back Loan as they will be for all business debts.

The general rule of liquidation is that the business assets are used to pay the business creditors first. If there are insufficient business assets and there is a shortfall then those creditors will not get paid in full – and sometimes not at all. 

Those creditors who do not get paid in full can not pursue the directors or shareholders personally and that includes the bank who have lent a Bounce Back Loan. The bank will claim the Bounce Back Loan shortfall from the Government. 

More help

If you need to discuss a Bounce Back Loan or a Coronavirus Business Intervention Loan (“CBIL’s”) just get in touch with me by email.

David Kirk

I have found Kirks Insolvency to be very reliable in terms of their dealings with us as their customers. They are clear in terms of the process and what it entails and are very prompt when it comes to communications. I would recommend their services.
Michael P

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David Kirk Portrait

David Kirk

Licensed Insolvency Practitioner