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What happens to my Bounce Back Loan on Liquidation?

The Quick Answer

A Bounce Back Loan will rank with all other unsecured creditors and normally be written off on liquidation. Unsecured creditors including suppliers, Business Rates, PAYE and VAT also normally get written off on liquidation.

The Bounce Back Loan is classed as an unsecured creditor and should not have been personally guaranteed.


A Bounce Back Loan cannot be personally guaranteed by the directors. If a company goes into Liquidation or Administration, the bank’s remedy for the funds is firstly a claim on the company assets and then any shortfall can be claimed from the UK Government. The bank cannot ask the shareholders or directors to repay the loan.

If you are a sole trader or partnership (but not an LLP) then you will be liable for the loan if your business closes.


If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

David Kirk


David Kirk ACA FABRP

We have just worked with Kirks to complete the closure of our company. Everything went smoothly and professionally. I would recommend this firm and the staff who were very very helpful and quickly finalised everything. Thank you Kirks.
Carol Hill



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David Kirk

Licensed Insolvency Practitioner