Find out more about the background and the legal argument to your right to challenge your bounce back loan.

Challenge your Bounce Back Loan

Thousands of people like you are struggling to pay off their Bounce Back Loan due to government restrictions frustrating their efforts. We can act on your behalf to improve the conditions of your loan or even write off the debt.

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What are the grounds for challenging the repayment of my loan?

We will argue that your contract has been ‘frustrated’ under common law because you have been unable to make trading profits to repay the loan due to continued lockdown restrictions and that you have suffered consequential losses that you are permitted to set off against the repayment of your loan.

How much will this cost?

We charge your company a fixed fee of £550 plus VAT to
a) write to your bank setting out the details of your loan and the legal reasons why your repayments should be alleviated;
b) if applicable write to the Financial Ombudsman challenging the loan; and
c) seek to negotiate a reduction in your liability to your bank.
We need to put time and effort into each individual case but we have kept our fees as low as we can.
We only charge one fee per business no matter how many loans you have taken out and even if you have loans with different banks – we will challenge them all for you, for the fee. That is equivalent to, on average, one month’s repayment on your loan.

What are the risks of making a legal challenge?

If you cannot afford to make your repayments the risks are very low – there is little to lose.

If you can afford to make your repayments but fail to do so you are technically in breach of your loan which could lead to early enforcement action by the banks, as backed by the Government. However, there will be huge political pressure on the Government not to enforce the loans early; and if you wish to continue to make payments we will make it clear in our correspondence with your bank that any repayments you do make are without prejudice to your legal position that you are entitled to have your loan repayments reduced or eliminated.

I thought my loan was guaranteed by the Government so why do I need to worry?

There is a common misconception, not helped by a lack of clarity from the Government at the time the loans were launched, that the guarantee from the Government is to your business. It is not. It is a guarantee to the banks in case you default on the loan.

How likely is it that we will succeed?

This is a relatively untested area of law – there is a strong chance that we can prevent any insolvency enforcement action being taken against you on the grounds that the repayment of the loan is disputed and that we can defeat any summary legal process taken by the banks and the Government. There is no guarantee of success, but challenging the loan in itself will buy you time, you can delay your repayments, we will seek to negotiate a reduction in your liability to your bank.

Why shouldn’t I just do this myself?

The legal arguments we are running as advised by our Queens Council are complex, and the grounds of challenge to the Financial Ombudsman are different from those with the bank. We will be sending very detailed and carefully thought through written challenges to your loan repayments. Also, if negotiations with the banks ensue, it's far better to be part of our action group so that we can negotiate on your behalf from a position of strength rather than be left out by trying to do it on your own.

What happens to my credit rating?

This is a key concern for many businesses. We can help protect your credit rating by deferring any judgement against you, or reverse a poor rating if we can successfully negotiate a settlement with the Government and the banks. We are writing to each of the major credit reference agencies on your behalf to seek to lift any notices placed upon your credit rating.

I was going to allow my business to go under as I cannot afford to repay the loan. Should I still do so?

You should take accountancy advice but there is the prospect that we can negotiate a write off of all or part of the loan so you should take that into account when making your decision.

Does it matter what type of business I have?

No. You can be a sole trader, a limited company, a partnership, or any other type of legal entity. If you qualified to take the loan then you are able to challenge it.


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