£50K Interest Free Loan for 12 Months

[ladymuck]

Some adjustments coming to repayment requirements



Rishi Sunak offers more help to 1.4m firms repaying Covid loans - BBC News

Out if interest, for those that took out the BBL (I didn't), what are your plans come your 12 month anniversary?

I had literally looked at when I was due to start repayments yesterday (June, 13 months after I took it out). I've already budgeted in the repayments so I plan to start as per the original agreement. I don't want a 10 year debt hanging over me, I want to get rid of it (and not do a moonlight flit with the cash).

I will look at the new terms to see what flexibility they offer (e.g. can I extend the duration and so reduce payments at a later date, how does the payment holiday thing work, etc.) so should I need more help, I know what my options are.

I've not tapped into all the money borrowed either, as I was fortunate enough in the end to keep working; I've got about 80% of it left in savings and I took less than half the upper limit. It's been very reassuring to have the capital there as a buffer, I must say.

[Paralytic]

Some adjustments coming to repayment requirements

Small firms are to get more time to repay state-backed loans taken out to help survive the coronavirus lockdown.
The changes include giving companies an option to extend the length of the loan from six to ten years under a "pay-as-you-grow" initiative.

Rishi Sunak offers more help to 1.4m firms repaying Covid loans - BBC News

Out if interest, for those that took out the BBL (I didn't), what are your plans come your 12 month anniversary?

[hugebrain]

If they are that dogged about investigating then the only issue I can see is that they would likely say that me looking for 500/day consultant work and not looking for £100/day grunt work is "not looking for work"

Come on, things aren’t that bad. 500 a day for a consultant!?

You can look for whatever work you like.

[ladymuck]

"carrying on business on 1 March 2020"
"impacted by coronavirus"


Effectively does this restrict the loan to those Ltds which:
a. had a contract on 1 March 2020 and
b. that contract subsequently ended?

It means that you had to be a viable business as of 1 March 2020 - not one already in distress. You don't have to have had a contract cancelled/end, just need to have been adversely impacted by events related to CV-19. So that could mean a reduction in working hours or a reduction in fees, changes in client or supplier payment terms, staffing issues, increased costs to the company, etc etc

[bingocaller88]

carrying on business on 1 March 2020

"carrying on business on 1 March 2020"
"impacted by coronavirus"


Effectively does this restrict the loan to those Ltds which:
a. had a contract on 1 March 2020 and
b. that contract subsequently ended?

[jamesbrown]

If they are that dogged about investigating then the only issue I can see is that they would likely say that me looking for 500/day consultant work and not looking for £100/day grunt work is "not looking for work"

Yes, I don't think they will (or would have the grounds) to make that case, but it doesn't hurt to keep on top of the rules, particularly your fiduciary responsibilities.

[Antimus]

If they are that dogged about investigating then the only issue I can see is that they would likely say that me looking for 500/day consultant work and not looking for £100/day grunt work is "not looking for work"

[jamesbrown]

So let me get this straight.

I pay myself a minimal amount, no pension contributions.

Would I be ok to do the following:

1. Get 50k loan
2. Carry on paying myself for 12 months
3. If I get work, pay the loan off entirely asap
4. If I don't get work, close up shop after 12 months and owe the government whatever is left in my account. Not worry because it's not personal liability

I get that suddenly paying myself a pension would look didn't is they every check up on it.

The short answer is: yes.

The slightly longer answer is that you'll need to keep an eye on what policy/strategy the banks adopt for chasing payments (i.e., how aggressively they chase), because there will be one across banks/government. You will also need to keep an eye on your fiduciary duties as a director, in order to ensure that those company liabilities cannot be transferred to you. For example, your business needs to be an ongoing concern; as soon as it becomes clear to you that the business isn't viable, you need to stop trading. Also, you need to avoid the preferential treatment of creditors (such preference payments, made within the last two years to connected persons, for example, can be set aside by the liquidator). This probably sounds a bit "woolly" because it is, but keeping decent records of your attempts to keep trading would be sensible.

[Antimus]

So let me get this straight.

I pay myself a minimal amount, no pension contributions.

Would I be ok to do the following:

1. Get 50k loan
2. Carry on paying myself for 12 months
3. If I get work, pay the loan off entirely asap
4. If I don't get work, close up shop after 12 months and owe the government whatever is left in my account. Not worry because it's not personal liability

I get that suddenly paying myself a pension would look didn't is they every check up on it.

[SussexSeagull]

I'm just wondering if anyone has seen the smallprint in the BBL documents/rules or had it explained to them by an accountant to confirm this understanding?

It is a debt taken on by a Limited Company with no personal liability. So long as it is used correctly - e.g. paying Salary - if the business ceases to be a going concern and is closed they are in the queue with any other creditors.