Nicole Sharples, Director of Business Helpline Group, shares an insight into understanding Bounce Back Loan Repayments and Insolvency for furniture retailers.
When Bounce Back Loans (BBLs) were first introduced in 2020, they served as a critical lifeline for many furniture businesses. With showrooms shut, supply chains disrupted, and customer demand plummeting, the scheme provided much-needed breathing space.
Backed by the government and delivered through banks, BBLs offered loans of up to £50,000 with no repayments for 12 months and an ultra-low interest rate. But in 2025, for many in the sector, that same support has become a growing source of stress.
Margins remain tight. Consumer confidence has dipped again. Energy, rent and import costs have risen. And for some furniture retailers, repaying a BBL on top of these pressures is becoming unmanageable.
So, what happens if you can’t repay it? Are you personally liable? And what steps can you take if your company is struggling?
Why Furniture Retailers Are Feeling the Strain
The furniture industry was one of the biggest users of the Bounce Back Loan scheme. According to the British Business Bank, a large portion of the £46 billion lent went to retail and manufacturing businesses, including thousands of furniture showrooms and suppliers.
The loans were fast, with limited checks and no requirement for personal guarantees. But that accessibility meant some businesses borrowed more than they could sustainably repay. And while the government guaranteed the loan to the lender, that guarantee doesn’t apply to your business or to you personally.
Are You Personally Liable?
At Business Helpline, we’re often asked whether directors are personally on the hook for repaying a BBL. In most cases, the answer is no. Bounce Back Loans were made to the company, not to you.
If the company becomes insolvent and goes through a formal process like Creditors’ Voluntary Liquidation (CVL) or Administration, the BBL is treated as unsecured and written off, provided the director hasn’t broken any rules.
You may only be held personally liable if:
- You provided false information on the application (e.g., inflated turnover)
- The loan was used for personal purchases
- You continued trading when the company was clearly insolvent
- You transferred company assets to another business below market value
If you acted in good faith and kept accurate records, your personal assets are usually protected.
When a BBL Becomes a Burden
We’ve supported dozens of directors in the furniture sector who were just about keeping things going until BBL repayments tipped them into the red. Common red flags include:
- Using personal funds to meet repayments
- Delaying VAT or PAYE to stay afloat
- Struggling to pay suppliers or wages
- Taking on other debt just to cover the BBL
If this sounds familiar, the most important thing is not to delay. Time is your greatest asset and the earlier you act, the more options you’ll have.
What If You Miss Repayments?
Your lender may start by contacting you directly. If you continue to fall behind, they could:
- Issue a default notice
- Engage debt collection firms
- Demand full repayment
- Pursue legal action in more serious cases
While the loan is government-backed, the lender holds the account and can act like any other commercial creditor.
What Are Your Options?
1. Pay As You Grow (PAYG)
This government-backed relief allows you to extend the term of your loan to 10 years, take a six-month repayment holiday, or switch to interest-only payments temporarily. Most banks offer it and it can provide some short-term relief.
2. Company Voluntary Arrangement (CVA)
A CVA allows your company to restructure its debts (including BBLs) and repay what it can afford over time. You’ll need a licensed insolvency practitioner to put one in place.
3. Administration
If the company has longer-term potential but needs space to breathe, Administration can offer legal protection while you restructure or seek a buyer. It’s a more formal process but can sometimes preserve the business and jobs.
4. Creditors’ Voluntary Liquidation (CVL)
If your company is no longer viable, a CVL can be the most responsible route. The BBL and other unsecured debts would be written off, and if you’ve acted correctly, personal liability can be avoided.
Why Acting Early Matters
Delaying the inevitable is one of the most common and most costly mistakes we see. Directors often hope that the next big order or seasonal uplift will turn things around. But when payments are missed and creditor pressure mounts, the risk of wrongful trading, CCJs, and personal exposure increases dramatically.
Getting advice early helps protect your options and your reputation.
Final Thoughts
The Bounce Back Loan was a lifeline for many furniture retailers and manufacturers, but it was never designed to be a long-term fix. If your loan has become a burden, you’re not alone.
At Business Helpline, we provide free, confidential advice to directors across the furniture sector. Whether your business can be saved or needs to close, we’ll help you navigate the path forward, calmly, clearly, and in control.
Free 24 hour helpline: 0800 088 2142
