Bounce Back Loans and Furlough. Are They Simply Delaying the Inevitable?

From their offices in Southend and Ipswich, DCA Business Recovery are the specialists that people turn to in difficult times when spiralling debts, creditors and the threat of bankruptcy are all too real.

Established more than 15 years ago, this expert team has amassed over 50 years of combined insolvency experience between them. They offer a range of services to help, and advise, both individuals and businesses of any size who have reached a critical point with their cash flow including:

• Insolvent liquidations
• Solvent liquidations 
• IVAS Individual Voluntary Arrangements
• CVAS Company Voluntary Arrangements
• Bankruptcy

How DCABR guides clients through challenging times

A client’s initial contact with DCA offers much needed reassurance. It may follow an extended period of worry and concern often confused by incorrect or misleading information. Business BASE member Luke Cockerton is a Director at DCA and helps to cut through this misinformation, gathering the facts and offering unbiased, professional and honest advice.

The www.dcabr.co.uk  website provides potential clients with detailed advice on what to expect from this complicated process. They have adapted how they operate to enable the process of an insolvency to be undertaken virtually although Luke’s preference would always be to meet in person.

As Luke says, ‘This is why it is so vital to get accurate advice from a professional. A kind and understanding attitude is at the heart of our business and we aim to be dedicated, approachable and caring.’

The company philosophy is to help secure the best possible outcome, in the least stressful way. This explains what makes this company so widely recommended by accountants and financial professionals. Luke’s area of expertise is insolvent liquidations, and his role includes:

• Assessing Directors’ loans which are required to be repaid under liquidation
• Meeting any statutory regulations or legal requirements especially if shareholders are involved.
• Considering larger creditors who may wish to appoint their own liquidators such as a bank.
• Assets whether leased or not
• Landlords, leases, issues of locks being changed
• Future intentions such as the retention of the company name
• Offering support to employees in their claims against their employer via the Redundancy Payment Office (RPO) which can often take six weeks or more  

Covid 19 has had a devastating effect on many businesses across all sectors and navigating their way through the array of loans, grants and The Furlough Scheme each with their own rules and regulations is confusing.

Warning that Spring 2021 could bring a surge in liquidations

One effect of Covid is that many companies who in normal times would have accepted the need to liquidate will continue to trade as they are now bolstered by Furlough and Bounce Back Loans. Directors of limited companies know their employees will be paid, as will they if they are on the payroll, as opposed to finding themselves with no income and no job had they previously opted to liquidate. Luke believes this is simply creating problems for the future with the twelve-month payment free period and enticingly low interest rates and he expects a surge next spring of directors liquidating their companies.

It is important to note that Bounce Back Loans are unsecured and without personal liability. But if a company enters into liquidation and the loan has been used for personal gains, and not business expenses, the director could be pursued by the liquidator.  Utilising Luke’s wealth of experience can avoid costly mistakes or errors in procedure saving both time and money. 

Any questions? Give DCA Business Recovery a call on 01702 344558

Key to surviving in the current climate is to fully understand the many implications and legalities. Seek out this professional, local help and arm yourself for the battle ahead.  

Available seven days a week from 8am to 8pm, offering a dedicated free helpline, the team at DCA Business are ready to work with you.