What Directors Still Need to Know

If your company received a Bounce Back Loan during the Covid pandemic and has since been dissolved or entered insolvency, you may still be at risk of investigation. The threat has not passed. In many cases, it is only now reaching its peak.

In 2024/25, the Insolvency Service secured 1,036 director disqualifications. Of those, 736 were linked to Bounce Back Loan abuse, around 71% of all disqualifications for the year. BBL investigations remain the single largest driver of director disqualifications in the United Kingdom.

Source: Insolvency Service disqualified more than 1,000 directors in 2024-25.

Why Are Bounce Back Loan Investigations Still Active in 2026?

The Bounce Back Loan Scheme closed to new applications on 31 March 2021. Many directors who took out loans in 2020 assume that five years is enough time for the risk to have passed. It has not. The 2024/25 figures above show BBL cases still driving the majority of disqualifications, and the Insolvency Service has continued taking on BBL-related casework well beyond the scheme’s closure. There are three main reasons.

The three-year limitation period runs from insolvency, not from the loan date

Section 6 of the Company Directors Disqualification Act 1986 (CDDA 1986) gives the Insolvency Service three years from the date of insolvency to begin proceedings. The clock does not start when the loan is taken out. It starts when the company enters liquidation, administration, or another formal insolvency process. The full rule sits in section 7(2) CDDA 1986: proceedings must generally be started within three years – from the date the company became insolvent, for companies that entered liquidation or administration, or from the date of dissolution, for companies dissolved without becoming insolvent.

 

This means that a company which received a Bounce Back Loan in 2020 but did not enter liquidation until 2023 or 2024 is well within the investigation window in 2026. For many BBL recipients, the three-year countdown only started recently.

This is also directly relevant if you’re reading this in 2026 and your company failed very early on. For some of the earliest Bounce Back Loan cases – a company that took out a loan in mid-2020 and was dissolved or wound up shortly afterwards – the three-year window may already be closing, or may already have closed. That is not automatically the end of the risk: the court can give the Insolvency Service leave to bring proceedings outside the three years. Whether your particular case is in or out of time is worth establishing precisely, rather than assuming either way.

Dissolved company powers extend the reach

Since December 2021, the Insolvency Service has been able to pursue directors of dissolved companies without any formal insolvency process having taken place. This power comes from section 6 CDDA 1986, as extended by the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021, which added directors of companies “dissolved without becoming insolvent” as a ground for disqualification alongside the original insolvency ground. A director who applied for a Bounce Back Loan and then dissolved the company, rather than entering liquidation, is not protected by having avoided formal insolvency.

The three-year limitation period for dissolved-company cases runs from the dissolution date, per section 7(2)(b). For many BBL-related dissolutions, that date falls in 2022 or 2023, which means these cases are still within the window in 2026.

Are the dedicated BBL investigation teams still active?

The Insolvency Service did not wind down its Bounce Back Loan investigation capacity after the scheme closed in 2021. The 2024/25 enforcement figures are the clearest evidence of this: BBL cases still accounted for around 71% of all director disqualifications that year, the same order of magnitude as in prior years. That volume of casework is not consistent with a team being quietly stood down: it points the other way, toward sustained investigative activity backed by ongoing referrals from lenders, HMRC, and Companies House into suspected Bounce Back Loan misuse.

What to Do Next

If your company took out a Bounce Back Loan and has since been dissolved, wound up, or put into administration, don’t assume the risk has passed simply because time has gone by:

  • Work out your actual dates. The three-year clock runs from insolvency or dissolution, not from when the loan was taken out, so pin down exactly when your company became insolvent or was dissolved before drawing any conclusions about whether you’re in or out of time.
  • Check whether you’re inside the window, near the edge of it, or arguably past it. Each of those positions calls for a different response, and “past it” is not an automatic all-clear given the court’s power to grant leave.
  • Don’t wait for a letter before acting. Insolvency Service investigations often start quietly: through liquidator reports, lender referrals, or dissolved-company reviews, well before a director hears anything directly.

How We Help

Regulators, claimants and boards are coming after individuals, not just companies. We arrange specialist solicitors and provide strategic support to directors facing Bounce Back Loan disqualification proceedings and Insolvency Service investigation, from the first sign of scrutiny through to any court process. To learn more, contact Essential Counsel for a confidential discussion.

 

Disclaimer: This article provides general information only. It is not legal advice and does not create a solicitor-client relationship. Laws and interpretations change. Readers are encouraged to confirm details with current primary sources or a qualified solicitor.