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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.
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David Kirk
ACA FABRP
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