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How should I spend my company Bounce Back Loan?

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What are the rules around the Bounce Back Loan Scheme?

The Bounce Back Loan Scheme (BBLS) has provided invaluable support to businesses struggling with the effects of coronavirus, and the scheme continues to evolve. You may now be able to access a top-up if you didn’t take your full entitlement originally, and also request an extension to the loan term if necessary.

With businesses suffering financial distress due to compromised cash flow and extreme trading disruptions, the emergency cash from Bounce Back Loans has offered valuable flexibility and helped many businesses to avoid full insolvency.

Worried about your Bounce Back Loan?

If you are a limited company director worried about how you are going to repay your Bounce Back Loan, we are here to help. As licensed insolvency practitioners we can talk you through your options when it comes to repaying your outstanding Bounce Back Loan, as well as handling all negotiations with creditors on your behalf. Call our team today on 0800 063 9262 .

How can a Bounce Back Loan help your business?

Bounce Back Loans are unsecured and guaranteed by the government, which has encouraged lenders to sanction loans. Other significant features of the Bounce Back Loan Scheme also make it attractive to businesses impacted by coronavirus, including:

  • A low interest rate fixed for the term of the loan
  • The ability to borrow up to £50,000 or up to 25% of your company’s annual turnover, whichever is the lower amount
  • 12-month interest and repayment holiday (you can now request a further six-month repayment holiday on the capital amount)

As you run a limited company, the money from your Bounce Back Loan belongs to the company as a separate entity. So how can you spend your company Bounce Back Loan, and is there any type of spending that isn’t permitted?

Start your online liquidation today

If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.

How should you spend your company’s Bounce Back Loan?

Although there are no detailed rules on how you can spend a Bounce Back Loan, it must be used for the ‘economic benefit’ of your business. You cannot spend it for personal purposes, and it’s highly advisable to keep written records of how it is spent, with invoices/receipts where appropriate.

If you consider your working capital needs– the general day-to-day outgoings that keep your company running – the loan could be extremely useful to prevent a slide into insolvency. Cash flow insolvency means you cannot pay bills as they fall due, and BBLS has been instrumental in helping businesses avoid this.

Here are a few areas where the money from a Bounce Back Loan can be spent:

Staff wages

As payroll is typically one of the highest outgoings for businesses, you could use your Bounce Back Loan to cover staff wages over the coming months.

Commercial rents

Although a moratorium on the forfeiture of commercial leases has been in place, it’s due to come to an end on 31st March 2021. If the moratorium isn’t extended again, the money from your Bounce Back Loan could be used to pay rent arrears, perhaps in instalments by agreement with your landlord.

Supplier payments

Paying supplier bills on time helps to keep the business running smoothly, and being on good terms with reliable suppliers is important for the longer-term when the immediate effects of the pandemic have reduced.

Business rates

Again, business rates can constitute a large proportion of outgoings for many businesses, and although business rates relief has been available for some industries in England, a Bounce Back Loan can help you keep up with your liability.


Paying general utility bills, such as heat, light, and water, with the funds from a Bounce Back Loan ensures you can run your business without undue pressure from utility companies and the water authority.

For more information on the Bounce Back Loan Scheme, and how you can spend your Bounce Back Loan, please contact our expert team UK Liquidators to arrange a free, same-day consultation. We work from an extensive network of offices around the country, and can provide the reliable professional advice you need.

Jonathan Munnery
Insolvency & Restructuring Expert

If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.

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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

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