Help with our bounce back loan

[Callum97]

Hi all,

I’ve spoken to HSBC about our Bounce Back Loan.

This morning,

They have simply said.

If you can’t pay your bounce back loan back. We will simply issue letters and follow our procedures to get our money back from the Government.

However we will not liquidate you in any circumstances, they have said you would tell companies house to Strike the company off, if you go down this route but don’t do this without telling us and letting us follow our procedures. No other debt than this I may add.

HSBC seems very supportive, I did mention that the company doesn’t have funds to do liquidation and that’s when they said we will just follow our procedure and then you strike company off.

I did also mention that I’ve put personal money in to try and keep it going and used funds all for the business what they can see nothing personal.

It’s a retail shop the debt from Bounce Back loan is 14K.

Just prices of everything killing us.

I thought HSBC would do the liquidation.

 

[ChrisCallaghan]

Hi Callum,

As you've discovered, no I am afraid BBL lenders are not going down the route of liquidating companies.

Is your business still trading? If so are you intending to cease to trade shortly?

 

[Lisa Thomas]

The Bank has no motive to pay as the government will simply pay the BBL back.

Your options are:

Do nothing and wait for Companies house to strike it off.
Pay to liquidate the company - either in court or voluntarily.

If the company cannot afford to pay for liquidation, sometimes directors will pay out of their own pocket. This is usually because the government will pay employee claims if a company enters liquidation.

 

[Frank Wessely]

Hi all,

I’ve spoken to HSBC about our Bounce Back Loan.

This morning,

They have simply said.

If you can’t pay your bounce back loan back. We will simply issue letters and follow our procedures to get our money back from the Government.

However we will not liquidate you in any circumstances, they have said you would tell companies house to Strike the company off, if you go down this route but don’t do this without telling us and letting us follow our procedures. No other debt than this I may add.

HSBC seems very supportive, I did mention that the company doesn’t have funds to do liquidation and that’s when they said we will just follow our procedure and then you strike company off.

I did also mention that I’ve put personal money in to try and keep it going and used funds all for the business what they can see nothing personal.

It’s a retail shop the debt from Bounce Back loan is 14K.

Just prices of everything killing us.

I thought HSBC would do the liquidation.

Hi Callum97

The above comments succinctly set out the Bank's position, your options and the payment of employee claims.

One further point to highlight is that in an insolvency, the Government will not now pay employee-type claims from Directors, even if you are on the payroll. As a matter of policy change since September 2021 Directors are now being routinely told that their redundancy claims are rejected and that they will have to go to an Employment Tribunal if they wish to pursue this.

Thanks.

 

[Callum97]

Hi Callum,

As you've discovered, no I am afraid BBL lenders are not going down the route of liquidating companies.

Is your business still trading? If so are you intending to cease to trade shortly?

Dear Chris,

I’ve put loads of money into the company to try and keep it going so now I just want a route out.

My shop downfall is, utilities is mainly to blame.

When business was good many years it bought me a house. Along with a nice car.

I can’t tell you the amount of shame and embarrassment I feel failing. Knocked my confidence.

 

[Callum97]

Hi Callum97

The above comments succinctly set out the Bank's position, your options and the payment of employee claims.

One further point to highlight is that in an insolvency, the Government will not now pay employee-type claims from Directors, even if you are on the payroll. As a matter of policy change since September 2021 Directors are now being routinely told that their redundancy claims are rejected and that they will have to go to an Employment Tribunal if they wish to pursue this.

Thanks.

I’m happy to take no redundancy. I’m working in Tesco now. I will go back to self employment but need to sort my personal financial situation out now.

 

[ChrisCallaghan]

Dear Chris,

I’ve put loads of money into the company to try and keep it going so now I just want a route out.

My shop downfall is, utilities is mainly to blame.

When business was good many years it bought me a house. Along with a nice car.

I can’t tell you the amount of shame and embarrassment I feel failing. Knocked my confidence.

Callum,

As @Lisa Thomas has summarised, your options at this point are either pay a liquidator (like myself, @Lisa Thomas & @Frank Wessely ) to liquidate your company, or wait for the company to be struck off from Companies House.

The positive with the first option is that it is quick and efficient. The obvious negative is the cost involved. Feel free to message if you would like a quotation. I'm sure @Lisa Thomas and @Frank Wessely would also be happy to provide quotations.

The second option, waiting for the company to be dissolved, is nicely summed up in the below post:

CLOSING A LIMITED COMPANY WTH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER

CLOSING AN INSOLVENT LIMITED COMPANY WITH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER If a company is unable to carry on trading due to becoming insolvent the standard procedure for closing it down is for the directors to appoint an Insolvency Practitioner to liquidate it...

www.ukbusinessforums.co.uk

The obvious benefit with this option is that it's essentially free. The negative is time. HSBC will object to any strike of action, but it will eventually go through. Currently I am seeing it take anywhere between 12 - 24 months. Please be aware with this option you will still get phone calls and letters from HSBC and any agents they choose to instruct.

Happy to have a chat on the phone to talk through these options if you would find it helpful.

 

[ChrisCallaghan]

One further point to highlight is that in an insolvency, the Government will not now pay employee-type claims from Directors, even if you are on the payroll. As a matter of policy change since September 2021 Directors are now being routinely told that their redundancy claims are rejected and that they will have to go to an Employment Tribunal if they wish to pursue this.

Hi Frank,

This is news to me! Do you mean since Sept 2022?

 

[Frank Wessely]

Hi Frank,

This is news to me! Do you mean since Sept 2022?

Lol, no Chris. There has been a gradual creeping of resistance to directors' ERA claims by the RPO. Now it appears to have reached a position where such claims will be rejected as a matter of course with the stated option of a Tribunal Hearing if the claimant wishes to pursue. A much higher burden of proof. The cynic would say this is simply a money saving exercise by the Government. I can send you (and anyone else) some further information if that's helpful.

Thanks.

 

[ChrisCallaghan]

Thanks for sharing Frank. I've definitely seen increased push back and greater evidence being required, but it's the first I've heard about having to Tribunal route. Ridiculous!

 

[Callum97]

Thank you Lisa.

You’ve been exceptionally great.

 

[Lisa Thomas]

Lol, no Chris. There has been a gradual creeping of resistance to directors' ERA claims by the RPO. Now it appears to have reached a position where such claims will be rejected as a matter of course with the stated option of a Tribunal Hearing if the claimant wishes to pursue. A much higher burden of proof. The cynic would say this is simply a money saving exercise by the Government. I can send you (and anyone else) some further information if that's helpful.

Thanks.

I've spoken to my employee claims contact regarding this. They have advised, as Frank said that directors claims are being resisted to. They have replaced the old RP3 form with a questionnaire, requestesting all sorts of information, in what seems to be an effort to put directors' off claiming.

In addition they have now decided to abolish the NMW uplifts completely. This means that many claims are being rejected on the basis the wages are so low they are not classed as employees. My contact is having to rework claims in order to get them reassessed and processed.

They keep promising new guidance but it hasn't been issued yet.....