02920 829 100 
*Limited Time Offer* – Covid loan repayment window opens until December 2025
October 8, 2025
By Kate Heaney
Under the BBLS, eligible businesses could borrow between up to £50,000, at a low interest rate of 2.5% per annum, and was 100% guaranteed by the government. CBILS also supported eligible businesses by providing access to loans and other finance of up to £5 million, with the government partially guaranteeing 80% of the finance and paying the interest and any fees for the first 12 months.
What is the Covid repayment window?
Whilst many companies legitimately received support through such schemes, the government estimates that over £10 billion has been lost due to pandemic fraud, flawed contracts and a mismanagement of pandemic era procurement and schemes. Whilst £1.54 billion has already been recouped, it is estimated that £1.88 billion is still outstanding in fraudulent bounce back loans.
On 12 September, the government launched a new voluntary repayment scheme (VRS) which gives businesses who received financial support during the pandemic through schemes such as BBLS and CBILS until December 2025 to repay it. Whilst available to all businesses, this “use it or lose it” and “no questions asked” opportunity primarily targets those businesses which were either not eligible or took advantage of such schemes without truly requiring it.
Importantly, the VRS applies to all Covid schemes, including grants, social security and tax benefits; and not just BBLS and CBILS. Therefore, this catches other schemes that were available at the time, such as the Coronavirus Job Retention Scheme, Eat Out to Help Out Scheme and Grants from the Department for Health & Social Care.
Why act now?
The government will receive additional investigatory powers next year, therefore the aim of the VRS is to provide those businesses with a final opportunity to repay the monies received before tougher sanctions come into place. The Insolvency Service may also investigate a company which has not repaid any monies borrowed, even if the company has now dissolved. However, directors or members trying to dissolve a company with an outstanding BBLS or CBILS loan, may receive an objection to any dissolution application. If businesses or individuals have acted fraudulently, or misappropriated the monies received through such a scheme, they will have breached its terms and those persons may be held personally liable and potentially subject to sanctions.
In addition, directors could face disqualification or compensation orders if they fail to come forward. As a result, a sharp increase in bankruptcy applications, company liquidations, director disqualifications and claims for misappropriation are likely on the horizon.
For businesses that legitimately received support through the pandemic, the normal repayment terms will apply. However, this could be a good opportunity to review records to ensure they have not inadvertently received support they shouldn’t have.
If you have any questions or concerns regarding the VRS, or need any help or advice on an insolvency related matter, please contact one of our insolvency specialists on 02920 829 100 for a free initial chat or via our Contact Us form.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
