Can I liquidate a company with a Bounce Back Loan or CBILS debt?
An outstanding Bounce Back Loan or CBILS facility does not prevent a company entering liquidation. The lender is a creditor and the borrowing must be disclosed. Government backing protects the lender under the scheme; it does not automatically cancel the borrower’s debt or excuse misuse.
Business Insolvency Helpline • Checked 1 November 2026
General guidance, with procedural detail focused on England and Wales. Rules and routes can differ in Scotland and Northern Ireland.
Will I have to repay the loan personally?
Bounce Back Loans did not require personal guarantees. That does not prevent scrutiny of false applications, personal use or other misconduct. A company’s failure and misuse of borrowing are different issues.
CBILS terms can differ, including security and guarantees on some facilities. Obtain the agreement and check what was actually signed rather than applying Bounce Back Loan rules to every pandemic loan.
Which records should I prepare?
- The loan application and turnover evidence used.
- The agreement, repayment history and lender correspondence.
- Bank statements showing receipt and use of the funds.
- Evidence supporting payments to directors or connected parties.
Explain transfers clearly. A payment description alone may not establish whether money was used for a legitimate business purpose.
What if the company can still recover?
Discuss repayment difficulties with the lender and assess any available support alongside the wider cash-flow position. A reduced payment does not solve an underlying business that cannot meet ongoing costs.
If closure is required, choose an appropriate process. Do not use strike-off to avoid the loan or accept a promise that selling the company makes all former director responsibilities disappear.
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Related questions
Do not use dissolution as a debt-avoidance route. The lender can object, and dissolved companies can still attract investigation.
No. It is a lender protection under the scheme. Personal exposure depends on the borrowing terms and conduct.
No. A genuine business can fail after borrowing. The application and use of funds need to be assessed on the evidence.
Sources checked for this guide
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