You took a bounce back loan - what now?

Last post: Nov 23, 2021

A question we hear increasingly often is: "Should I repay my Bounce Back Loan?”. It sounds like a straight forward question but the first thing to establish is which of the two broad camps we have seen emerge your business falls into: companies who needed to use the money operationally during Covid-19 and those who didn't.

Now ask yourself what bucket you fall into.
If you didn't need the money operationally, you have either invested it or you still have the money. Assuming you didn't use the money to pay for that dream car and you have used it to grow your business you probably have strengthened your balance sheet. If you still have the cash, you may still be wondering should I pay it back? Let's look at that in a minute.
But first… What if you did need the cash operationally, perhaps even to stay afloat? And let's face it, that's why the government put it in place in the first instance. If you did need the money, here is the inevitable outcome of that scenario. You are now left with a £50k loan on your balance sheet.

In this case, the simple fact is that you need now more than ever to focus on driving profit, cash and creating value in your business. My Controller has created a helpful 8-step Pathway to Profit to help focus the mind - this is both a description of and a prescription for creating profit in your business.

Follow these steps:

1. Chase the Dream – Why did you start your business in the first place?

2. Get A Plan – What are you going to do this week / month / quarter to drive business results?

3. Make it Happen – How can you improve your operational processes and controls to drive profit and cash?

4. Evaluate Marketing – Do you understand how effective your marketing spend is?

5. Manage Sales – Do you actively manage your sales team and effort in terms of bid-to-win, average deal size, and profitability?

6. Learn, Adapt, Improve – How can you make adjustments to your offering, marketing, sales, delivery and cash collection? Without lowering your aspirations!

7. Monitor Progress – How can you create a system with regular feedback on performance? Then make sure that you have the discipline to amend the plan based on the achieved results, keeping a clear focus on the ultimate goal.

8. Create Profit - Apply hard work and discipline! No short cuts. Work hard. Visualise your outcome. See yourself driving that dream car, living in that dream house, or having the time on the beach… Be consistent!

The reality is that you need to grow the assets in your business to strengthen your balance sheet. If you focus on driving profit, then make sure that the profit turns to cash. You are now in a position to make selective investments that will create business value for the shareholders… for you! 

If, however, you didn't need to spend your Bounce Back Loan to stay afloat during the pandemic and the money is still sitting in your account, the key is to ask yourself how you could use it to drive value in your business. If you are unsure, get expert advice from your accountant to decide what is the best way forward.

This blog was contributed by My Controller, an Accountancy & Tax practice with offices in Windsor and Harrow, supporting clients throughout the Thames Valley and London. Telephone My Controller Windsor on 01753 840 948 or email