Advise Needed Please: Striking off Small Business ( Ltd) with BBL

[biker56]

Hi all,

Newbie here. Happened upon this site whilst searching on the internet.

Appehensively, i need top close my limited company of 10 years due to lack of business since 2021 - have trying to win bids but haven't been sucessful. Eventually took a full time job with a former client in 2021. The business took a bounce back loan of a total 8K. BBL went towards paying off business debts ( overdraft) , salary and business expense. Since beginning of 2022, i have been using personal funds to pay off the bounce loan and overdraft interest. There is now an outstanding balance of about £5000 on the BBL and an overdraft of about £5000. I learnt this week that I personally guarantee the overdraft. Sadly, i can no longer continue funding the business. I simply don't have the means to.. i have more debts because of the use of personal funds for the company. I spoke to the bank the business banks with and they advised I contact the business debt line. Business debt line advised that i stop paying the bbl and get the company struck off. They also mentioned that becasue of the bbl, the application will be automatically rejected and i could be investigated.
My accountants is unhelpful, they seem to think i should keep the company running when i have told them a few times I don't have the money. I had to pay their fees with my credit card. They have referred me to an IP, which i don't have the money for. I'm extremeley stressed and disappointed that i haven't been able to keep this business successful.

Please any advise on the best steps will be greatly appreciated. Many thanks in advance

 

[japancool]

Business debt line advised that i stop paying the bbl and get the company struck off. They also mentioned that becasue of the bbl, the application will be automatically rejected and i could be investigated.

They're right, but if you did nothing wrong and used the BBL for the economic benefit of the company (and were entitled to 8k in the first place), you have little to worry about.

Your biggest concern should be the £5k overdraft. Everything else is the company's debt, not yours, but you are liable for this one so you need to work out what you can do. You may be able to come to an accommodation with the bank if you can offer them a partial lump sum payment, or you may be able to come to a payment plan, but you need to speak to them. As it's £5000, it's eligible for the High Court, iirc.

 

[biker56]

Thanks @japancool for the response. The business was entitled and funds were used for the business.
I don't have a lump sum and monthly payments won't be easy but will speak to the bank and see .

 

[Gyumri]

I would continue to make affordable payments to pay off the overdraft as that is personally guaranteed. You could pay it off over about 15 months because it would take that long for the bank to obtain a judgment against you.

If you offer them regular payments they can hardly object and even if they object just reduce the overdraft anyway.

The bbl and any company debts are not your personal concern.

 

[Lisa Thomas]

Sounds to me like the bank's advice is probably right.

I'd be happy to chat to you (for free) to ensure dissolution is the right option for you.

Take a look at my video here, I cover dissolution briefly towards the end:

- YouTube

Enjoy the videos and music that you love, upload original content and share it all with friends, family and the world on YouTube.

youtu.be

 

[biker56]

Sounds to me like the bank's advice is probably right.

I'd be happy to chat to you (for free) to ensure dissolution is the right option for you.

Take a look at my video here, I cover dissolution briefly towards the end:

Thanks Lisa. Will watch the video and get back

 

[biker56]

I've also just found out from Barclays that the bouce back loan was guarantee by me.

 

[japancool]

Odd. They shouldn't have requested a personal guarantee for a BBL.

 

[Tables Force]

I've also just found out from Barclays that the bouce back loan was guarantee by me.

RUBBISH!

If you were entitled to the amount you borrowed, and did not use it incorrectly, there is NO personal liability.

 

[Mark T Jones]

As above - there are no PGs on BBL. You need to go back and look at your paperwork

It's possible that you had prior facilities with PG and they are allocating payments against your BBL

 

[Lisa Thomas]

In the main you are not personally liable for a BBL (although in some rare cases I understand that if the bank held existing security, that those items if security could be utilised to try and seek recovery of any non payment of BBLs.)

See my rant here on the subject:

- YouTube

Enjoy the videos and music that you love, upload original content and share it all with friends, family and the world on YouTube.

youtu.be

 

[Samian]

Can give you some free advice on this, [email protected]

 

[eteb3]

They're right, but if you did nothing wrong and used the BBL for the economic benefit of the company (and were entitled to 8k in the first place), you have little to worry about.

I’m not asking to increase the OP’s anxiety, but… if the director used the BBL to pay off an overdraft the director had personally guaranteed, is that not a personal benefit and possibly in breach of fiduciary duties not to make a private profit?

 

[japancool]

I’m not asking to increase the OP’s anxiety, but… if the director used the BBL to pay off an overdraft the director had personally guaranteed, is that not a personal benefit and possibly in breach of fiduciary duties not to make a private profit?

I'm not IP, but I would say, given the interest rate on overdrafts, it's still of economic benefit to the company.

 

[biker56]

I’m not asking to increase the OP’s anxiety, but… if the director used the BBL to pay off an overdraft the director had personally guaranteed, is that not a personal benefit and possibly in breach of fiduciary duties not to make a private profit?

The initial overdraft had no guarantee, ( the bbl went towards that. The guarantee was applied when we had to ask for the overdraft to be increased.

 

[Mark T Jones]

The initial overdraft had no guarantee, ( the bbl went towards that. The guarantee was applied when we had to ask for the overdraft to be increased.

So you had an overdraft with a PG?

Was there a ceiling o the PG?

Details matter here. Have you reviewed all relevant paperwork?