Bounce back loan query

[abph]

Using a different login, partially to protect against asking a daft question.

I am looking to acquire a small business, who has been trading as a sole trader for the last 9 years, and has presented accounts for the last 5. As part of the acquisition, I will be buying the assets of the business under a limited company. The present owner will continue to work, and I may set up a share agreement if required.

Question, is it possible to apply for a bounce back loan under these conditions? Yes the company has been trading for required duration, but will purchased by a new limited company?

Thoughts?

[akirk]

abph said:

Using a different login, partially to protect against asking a daft question.

I am looking to acquire a small business, who has been trading as a sole trader for the last 9 years, and has presented accounts for the last 5. As part of the acquisition, I will be buying the assets of the business under a limited company. The present owner will continue to work, and I may set up a share agreement if required.

Question, is it possible to apply for a bounce back loan under these conditions? Yes the company has been trading for required duration, but will purchased by a new limited company?

Thoughts?

What is the legal entity that would be applying?
I would suggest that a new LTD Co. will not be of sufficient age to apply...
Can the current business apply before you purchase it?

[abph]

akirk said:

What is the legal entity that would be applying?
I would suggest that a new LTD Co. will not be of sufficient age to apply...
Can the current business apply before you purchase it?

The new limited company would be applying.

My gut feeling agrees with you, however would like to know nevertheless.

I may have to go down this road.

[anonymous-user]

The company would need to have been established before 1 March 2020

https://www.gov.uk/guidance/apply-for-a-coronaviru...

[akirk]

JPJPJP said:

The company would need to have been established before 1 March 2020

https://www.gov.uk/guidance/apply-for-a-coronaviru...

what is the current rate for shelf companies dating from before then?!

[Ean218]

The sticking point for you is not whether the company existed or not, but that you can only borrow for up to 25% of turnover for the previous financial year. If the company was dormant or did not exist then you can only borrow 25% of £0.

[mondeoman]

Ean218 said:

The sticking point for you is not whether the company existed or not, but that you can only borrow for up to 25% of turnover for the previous financial year. If the company was dormant or did not exist then you can only borrow 25% of £0.

or 25% of forecast....

[abph]

mondeoman said:

Ean218 said:

The sticking point for you is not whether the company existed or not, but that you can only borrow for up to 25% of turnover for the previous financial year. If the company was dormant or did not exist then you can only borrow 25% of £0.

or 25% of forecast....

So the sole trader can apply for the loan, however the new Limited Company (buying the assets of the sole trader, and probably making them a share holder) cannot?

[wattsm666]

If the sole trader applies for the loan the individual is liable for it, not you or the limited company. Cannot see he would want to do that under any circumstances.

[abph]

wattsm666 said:

If the sole trader applies for the loan the individual is liable for it, not you or the limited company. Cannot see he would want to do that under any circumstances.

That's my understanding also. Thanks for clarification guys

[jammy-git]

Completely against the rules, but I have heard of companies "trading" before March 1st, but actually registered with Companies House after March 1st still successfully getting a BBL.