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"Bounce Back Loan proved to be a massive misnomer. It has been more of a millstone around my neck"

ended 06. August 2024

Newspage asked six small business owners who took out a Bounce Back Loan about how it impacted them and their businesses four years on. One said: “Bounce Back Loan proved to be a massive misnomer. It has been more of a millstone around my neck”.

Another added: “I finally broke down and asked my parents to help me clear my BBL. I consider myself resilient but my debt to them now hangs over me and is stifling my new business.”

A third, a magician, said: “The Bounce Back Loan feels like a tight knot around my business's neck, and has cast a dark spell over its future.” Their views and experiences are shared below.

8 responses from the Newspage community

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Sarah Gatford
Director - Head of Interactions at Sarah Gatford Ltd
As the sole director of a micro limited company, I had been wholly excluded from other pandemic assistance programs like furlough payments. Bounce Back Loans of up to £50,000 seemed like they could be a vital lifeline to cover expenses and keep my business afloat until the situation improved. Bounce Back Loan proved to be a massive misnomer. It has been more of a millstone around my neck than any bounce-back opportunity. When the Bounce Back Loan Scheme launched, I spoke on local TV that loans were not genuine financial support, as they would eventually have to be paid back. However, with little revenue coming in during lockdowns and no other government assistance available, I felt I had no choice but to take one on to keep my business from going under and pay basic personal expenses. I was one of the 'forgotten', or 'excluded' 3 million small business owners who received no meaningful financial help when others got furlough payments. My BBL has definitely not helped me bounce back.
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Denise Yeats
Director at Denise Yeats Empowered Partnerships Ltd
Until March 2020, I had an award-winning events company with many charity projects planned. When the pandemic hit, and events cancelled, with a limited company I wasn’t entitled to Government financial assistance. To survive I had to use my savings (around £20,000 which I had built up, including to cover my corporation tax bill). I was struggling to pay my rent, with no reductions in place. So I took out a £10k BBL thinking this would be a 1-year crisis at worse, but it just went on and on. As a triathlete and a woman going through the menopause, I decided to reinvent myself, retraining as a triathlon coach and then as a personal trainer, specialising in working with women at this life stage. In April of last year, I was at an all-time low, suffering mentally at my inability to bring in enough income from my new business. I finally broke down and asked my parents to help me clear my BBL. I consider myself resilient but my debt to them now hangs over me and is stifling my new business.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The idea of Bounce Back Loans was noble but the short-sightedness of the then Chancellor, and subsequently Prime Minister, proved disasterous for many small businesses. Sunak should well have known that if you pump significant amounts of cash into the economy, coupled with a long running QE program, inflation is the sausage in the machine. With Bounce Back Loans tied to the Bank of England rate, they were inevitably going to rise to combat the inflationary pressures. It was just another sympton of an incompetent Government.
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Josie Jones
Founder at The Mindful Cook
I'm a certified food and eating psychology coach. I started out in business in 2017 running wellbeing retreats for women focused around healthy eating. When Covid struck, I had two fully booked retreats, one of which was March 27th 2020, one online programme, The Non-Diet Method, and no business premises. I had money tied up in venue bookings and expenses for events, and I had taken deposits and payment for the events, some of which had been absorbed into cashflow. Over the period 2020/2021, I had to cancel two events and postpone one. The venue was unable to refund all my payments, so in order to honour refunds to my customers, I had to take out a Bounce Back Loan. I also had to postpone my own wedding. Due to my no premises status and low income, I received around £600 from the Government and had to take a BBL of just short of £5k, which I am still paying back. Small numbers can really have a big impact on a small business.
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Rachael Dines
Founder & Director at Shake It Up Creative
As a marketing company without premises, we fell through the cracks in 2020 when it came to significant financial support. I took out a £12k Bounce Back Loan in August 2020 and in May 2024 I just finished paying it back. In March 2020 I didn't think it would be something I needed, I thought the company would 'be ok' and then my business partner resigned the following month taking 90% of our business with them three months later. By September, I had zero contracts. I couldn't sleep at night for worrying and honestly, the loan saved my company. During the repayment period, it feels like a rock on your back, but little by little my company has recovered from both the Covid period and the business breakup and is now in a healthy position. We have had to continue to be careful about outgoings along the way. My advice to any small business owner would be to try and pay small extra amounts off when you're able to, gradually shrinking the interest down and speeding up the process.
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Jo Spolton
Founder at Rumage
During Covid, online shopping was the only option. But with that, awareness around how much damage is done to the environment by over production and consumption of new stuff started to grow, and the resale side of our business started to boom. We took a Bounce Back Loan to capitalise on this and ride the wave, evolving our product offering and growing the number of partners. Our user numbers have gone up steadily as a consequence, but the margins on resale are small. The monthly payback represents a chunky part of our overheads and we have utilised some of the payment holidays avaible so far to keep the businesss iterating and on track. Many circular businesses are finding it tough going currently because the business models are finely balanced with often limited head room. With the economy still struggling, the climate continues to prove challenging and the Bounce Back Loan is adding to the strain.
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Eddie Young
Director at Eddie Young Magic
The Bounce Back Loan feels like a tight knot around my business's neck, and has cast a dark spell over its future. The Government shut down the entertainment and hospitality sectors first, and kept us under restrictions the longest. With no additional support from the Government since lockdowns ended, my business has effectively vanishished back to where it started, like a disappearing act gone wrong.
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Ian Hepworth
Director at Funding Solutions UK Limited
One of the main issues with Bounce Back Loans is that they were used to fund the losses of SMEs. This is in contrast to loans used to buy capital equipment that generates income or to fund working capital that generates profit. The money was just swallowed up by these losses and now there is a monthly repayment to make, which is a burden on cash flow with no additional income to show for it.