Self-employed & Coronavirus

[Ric]

ta pal. Hope you are still managing to grind.

Getting by thanks mate, but my business is dying on its arse. Like you I'm considering taking out one of these loans to try and keep afloat over the coming months. Has anyone else on here applied for one?

 

[blueinsa]

Could others perhaps share some advice - I will obviously speak to my accountant when she can be arsed to get back...

These business bounce back loans guaranteed to small business by the government seem too good to be true?

I had previously fallen through the cracks as a sole director of my Ltd firm, in terms of being not being worthwhile to furlough, the majority of my income is derived from dividends.

The bounce back loans are proving VERY popular. No repayments in the first year and the government paying the interest. Thereafter, 2.5% over the next five years.

Firms can lend up to £50k - up to 25 per cent of last year's turnover.

I am cautious by nature and don't really know what my business will look like (primarily around football) in three weeks time, never mind next year.

I qualify for £15k and it would be paid within 48 hours. Could I use the cash in my business to increase my salary instead (I pay PAYE now on the lower portion of my monthly salary) and wouldn't be able to use the cash towards a dividend anyhow?

One idea - Could the firm buy my car from me - it is worth around £15k and I have £8k to settle on the finance?

Subsequently, the car would be paid off in terms of personal liability and I would also be able to bank £7k in cash.

Would there be major tax implications for the business buying the car?

Another thing that worries me would be if the government are acting as guarantor, what if the business could no longer continue to trade in 12 months time?

The bank are covered for the money but am I covered from the government then coming after me - as a Ltd company I am pretty certain they couldn't come after my house or personal assets?

Any insights, ideas or advice would be welcome!

Applied yesterday and got a yes within 24 hours and money will be in tomorrow.

Its a no brainer given the rates and length of the loan with no guarantees needed.

 

[Gareth Barry Conlon]

There’s some decent advice here mate, which should cover some of your questions. Will move these posts to the self-employed thread so they don’t get lost in this mega thread.
https://www.moneysavingexpert.com/news/2020/05/small-business-boost-as-bounce-back-loans-launched/

As someone who has worked in Banks I have some first hand experience of how these used to work. Some years ago but the key point is that the Government guarantees the Bank for any losses, it doesn't step in and protect you directly. So if you get into trouble expect the Bank to chase you for the money all the way to the point where your LTD company has to fold. At that point the Bank will then seek to claim any residual losses via the Govt guarantee.

Don't expect a soft loan from the Bank. They can only claim the money back from the govt if they make evey effort to recover it from you first.

 

[blueinsa]

As someone who has worked in Banks I have some first hand experience of how these used to work. Some years ago but the key point is that the Government guarantees the Bank for any losses, it doesn't step in and protect you directly. So if you get into trouble expect the Bank to chase you for the money all the way to the point where your LTD company has to fold. At that point the Bank will then seek to claim any residual losses via the Govt guarantee.

Don't expect a soft loan from the Bank. They can only claim the money back from the govt if they make evey effort to recover it from you first.

Terms state that at no point though will they seek possession of your house or car etc. I have no issue in being asked to repay a loan i have taken and anyone taking this money with a view of not paying it back deserves everything they get anyway.

 

[blueparrot]

Applied yesterday and got a yes within 24 hours and money will be in tomorrow.

Its a no brainer given the rates and length of the loan with no guarantees needed.

If you don’t mind me asking, which bank, applied Tuesday not heard yet ?

 

[blueinsa]

If you don’t mind me asking, which bank, applied Tuesday not heard yet ?

RBS mate. Who are you with?

 

[blueparrot]

RBS mate. Who are you with?

TSB, I’ll give it until Monday, then try and contact them. Good to hear you finally have something.

 

[blueinsa]

TSB, I’ll give it until Monday, then try and contact them. Good to hear you finally have something.

Ive just checked RBS website and they are swamped with applications but they are getting through and i think its pretty much an automated process as we got out application email at 3 in the morning and a yes at 2 in the morning the following day. You will get it mate, just sit tight and it should be only a matter of days as they have got this spot on in terms of delivery.

Incidentally if you applied for the CBIL you can transfer that to this and shake off the guarantees and enjoy the better terms and rates.

Best of luck.

 

[Gareth Barry Conlon]

Terms state that at no point though will they seek possession of your house or car etc. I have no issue in being asked to repay a loan i have taken and anyone taking this money with a view of not paying it back deserves everything they get anyway.

I dont disagree. My experience, some years ago, when working at a Bank was that people assumed that the loan was soft, the default rates were really high as people just assumed the banks would then go to the government. Most Banks stopped offering them and the first iterations of these schemes were a bit of a failure.

As for your house, car etc. If you have other loans that are secured on your house then you could lose them through cross default clauses. This will be the minority. If your business has nominal assets then you have nothing to lose.

 

[blueparrot]

Ive just checked RBS website and they are swamped with applications but they are getting through and i think its pretty much an automated process as we got out application email at 3 in the morning and a yes at 2 in the morning the following day. You will get it mate, just sit tight and it should be only a matter of days as they have got this spot on in terms of delivery.

Incidentally if you applied for the CBIL you can transfer that to this and shake off the guarantees and enjoy the better terms and rates.

Best of luck.

I had the grant so not so urgent, think TSB being smaller have contracted the applications out. Never applied for CBILs as TSB said they were doing it but only managed to get the application process for that up and running this week.