Struggling with BBL repayments?

Running a small business in today’s climate is tough, and for many, Bounce Back Loan (BBL) repayments are adding extra pressure. In our latest forum-style discussion, we dive into real struggles faced by small business owners, like Steve, a bakery owner in Manchester, who is doing everything he can to keep his business afloat.

Topic: Small Business Debt Management – BBL repayments
Moderator: Tom Fox

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Post Title: Need Help: My Small Business is Drowning Under BBL
Posted by: Steve_Bakes84

Hi everyone,
I run a small bakery in Manchester. We took out a Bounce Back Loan (BBL) during the pandemic to stay afloat, but now, with costs rising and sales not bouncing back as expected, we’re really struggling to make the repayments. I’ve already extended the loan term to 10 years and opted for interest-only payments for 6 months, but now those are over, and the full repayments are kicking in. I’m worried we might go under.

Any advice on what we should do next? I feel like I’m running out of options.

Thanks in advance,
Steve

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Tom Fox (Licensed Insolvency Practitioner, Head of Insolvency at Umbrella.UK):

Hi Steve,

Thanks for sharing your situation; you’re not alone. Many small businesses are facing similar challenges with Bounce Back Loans. It’s great that you’ve taken some initial steps, like extending the loan and using interest-only options. That’s smart. Let’s break this down and explore a few avenues you can consider:

1. Cash Flow Review
   First things first, have you recently reviewed your cash flow? Sometimes, identifying unnecessary expenses or restructuring your operations can free up cash to help with repayments.
2. Government Support
   Are you aware of any current local or national grants that might be available to you? With rising costs, there might be new support schemes in place. It’s worth checking with your local council or the government’s small business support site.
3. Creditor Negotiations
   Have you spoken to your suppliers or other creditors about extending payment terms? Sometimes, renegotiating can give you more breathing room.
4. Debt Management Options:
   If things are getting really tight, it might be worth considering a formal debt solution. For example, a Company Voluntary Arrangement (CVA) could allow you to restructure your debts and make more manageable payments.

What’s your current monthly repayment amount compared to your monthly income? That might help determine the next steps.

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Steve_Bakes84:

Thanks for the quick reply, Tom. I’ve reviewed our cash flow, and we’ve cut down on expenses as much as possible, but our energy bills have almost doubled. We’re also still feeling the impact of inflation on ingredient costs.

The monthly repayment is £700, and on a good month, we’re bringing in around £5,000. But with wages, rent, and supplies, we’re often running close to the wire. Some months we don’t make enough to cover everything.

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Tom Fox:

It sounds like you’re in a tough spot, but there are definitely still options. Here’s what I’d suggest next:

• Talk to Your Lender
  While BBLs are backed by the government, the lenders themselves have some flexibility. They might offer you a further repayment holiday or another interest-only period.
• Consider Restructuring
  If your business is fundamentally viable but facing short-term challenges, a restructuring option like a CVA could help. It would freeze your unsecured debts and allow you to pay back a percentage over a set period.
• Insolvency Guidance
  If you think you’re at risk of insolvency, it’s crucial to seek professional advice early. As a Licensed Insolvency Practitioner, I always emphasise that early intervention can open up more solutions.

Would you like to discuss this in more detail offline?

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JaneCaféOwner:

Jumping in here—I was in a similar situation with my coffee shop. Tom helped us set up a CVA, and it was a game-changer. We were able to negotiate better terms and stay afloat. Steve, it might be worth exploring!

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Tom Fox:

Thanks for sharing your experience, Jane. Steve, it shows that there’s a way forward. Feel free to PM me if you’d like to schedule a confidential chat about BBL repayments.

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Steve_Bakes84:

Thanks, Tom. I’ll definitely consider it. I didn’t know CVAs could be an option for small businesses like mine. I’ll be in touch.

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Tom Fox:

Looking forward to it, Steve. Remember, you’re not alone, and there’s always a path forward—it’s just about finding the right one for your business.

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End of Discussion

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Conclusion
Many small business owners are navigating the challenges of BBL repayments, but as this discussion shows, there are practical steps and professional support available. The key takeaway? Don’t wait – seek advice early, explore restructuring options, and remember, help is always at hand.

If you’re a small business owner in a similar situation, reach out to an insolvency professional or contact Umbrella.UK Insolvency for guidance. Don’t wait! Request a free initial consultation today!