We are in no doubt that many businesses are struggling to manage their cashflow and meet obligations due to the challenging economic environment we are all experiencing.

It is important to remember that the bounce back loan agreements contain a clause making the business directors/owners personally liable for the repayment and so winding up the company will not wipe out the liability.

Also, the Government has indicated to the banks that provided the Bounce Back Loans that objections should be raised where a company is seeking to dissolve the business to avoid meeting its liabilities. Under the proposed legislation, any director found to have improperly abused the dissolution process could be disqualified for a period of up to 15 years and the legislation is likely to be applied retrospectively which would enable an investigation into directors actions prior to the new law coming into effect.

However, the inability to meet current liabilities need not lead to such a drastic outcome – as long as advice is sought sooner rather than later. We have helped a great number of businesses to restructure their finances and have successfully negotiated a variation in terms with creditors as well as extending the repayment term of Bounce Bank loans – which can be extended to 10 years – enabling those businesses to weather the economic storm.

As we have said many times before, the earlier the problem is addressed the greater the chance of a successful outcome. With this in mind, if any of our contacts are involved with, or knows of any business currently facing financial challenges, we would urge that decisive action is taken by seeking independent professional advice and that is why we are always available for an initial zero cost assessment which can be arranged by contacting Alistair Dickson.