Guidance

Voluntary Repayment Scheme for Bounce Back Loans: guide

Published 7 November 2025

1. What is the Voluntary Repayment Scheme?

The Voluntary Repayment Scheme allows individuals or businesses who received a Bounce Back Loan that they should not have taken out, who did not need, or are in default, to repay the loan voluntarily. For those individuals or businesses experiencing financial difficulty, further information can be found in section 9 ‘What if I am struggling to repay my Bounce Back Loan due to genuine financial difficulties?’.

2. Who can use the scheme?

• The scheme is designed for individuals or businesses who wish to come forward and repay their Bounce Back Loan voluntarily. If you are already repaying your Bounce Back Loan in accordance with your repayment schedule or through an agreed repayment plan or recovery process, you should continue doing so and do not need to take any further action under the Voluntary Repayment Scheme.
• Do I need to repay in full immediately? The Voluntary Repayment Scheme is intended for Bounce Back Loans which have not been paid back or where repayments have ceased. Individuals or businesses coming forward to repay through the Voluntary Repayment Scheme will be able to enter into repayment plans just like other borrowers and will not necessarily be required to repay the full value of the loan by 31st December 2025. Those who do will, subject to any lender checks, be able to set up repayment plans just like other borrowers and will not necessarily be required to repay the full value of the loan by that date. 
• What if I’m no longer in control of the business? If you are no longer in control of the business that received the Bounce Back Loan (e.g., you have sold it), you may still be able to make a voluntary personal contribution. You should explore repayment options with the original lender.

3. How long is the scheme open for?

The scheme is open until 31st December 2025. After this date, voluntary repayment under this scheme will no longer be available. 

However, any voluntary repayment arrangements set up before 31st December 2025 will continue as agreed. You can also contact your lender directly at any time to make repayments on outstanding loans. 

4. Does taking part give total protection from investigations?

No. The scheme does not provide amnesty from past, ongoing and future investigations or enforcement action. Making a voluntary repayment does not prevent or stop regulatory investigations, nor does it protect against investigations or enforcement action where fraud or other offences, wrongdoing or misconduct is suspected, whether by you or the business. Decisions about investigations and prosecutions are taken independently by relevant regulators and law enforcement agencies.

5. What are the benefits of voluntary repayment?

While it does not remove the possibility of investigations and enforcement action, coming forward voluntarily:

• Ensures the loan is repaid in full, avoiding further arrears or debt collection action.
• Can be taken into consideration by relevant regulators and law enforcement agencies when assessing the circumstances of your case or when deciding whether to open new investigations

6. How do I make a voluntary repayment?

To make a voluntary repayment contact your original lender to arrange repayment or set up a repayment plan.

Always use official channels for repayment and keep confirmation of your payment for your records.

7. What happens if I don’t use the scheme?

If you choose not to voluntarily repay and are later found to have obtained a Bounce Back Loan - you were not entitled to, you may face:

• Directors found guilty of misusing Bounce Back Loan funds may face personal liability, penalties, fines, and director disqualification for a period of 2 to 15 years.
• Formal recovery action for the outstanding debt.
• Regulatory or enforcement action.
• Criminal investigation and possible prosecution.

8. What constitutes receiving a Bounce Back Loan I was not entitled to or misuse of Bounce Back Loan funds?

Receiving a Bounce Back Loan you were not entitled to or misuse of Bounce Back Loan funds can include, but is not limited to:

• Using the funds for personal assets or purposes unrelated to the business.
• Exaggerating business turnover to secure a larger loan than entitled.
• Dissolving a business to avoid repayment obligations.
• A single company obtaining more than one Bounce Back Loan.
• Applying for a Bounce Back Loan when the business was not eligible.

9. What if I am struggling to repay my Bounce Back Loan due to genuine financial difficulties?

If you are repaying your Bounce Back Loan in accordance with your repayment schedule and facing genuine financial difficulty in doing so, you may be eligible for the “Pay As You Grow” scheme. This scheme offers options such as extending your loan term, making interest-only payments, or requesting repayment holidays. 

You may also be entitled to other support as determined by your lender.  Please contact your lender to discuss these options.

If you have defaulted on your repayments and your lender has issued a formal demand, contact your lender to discuss your options, you may be able to enter into a repayment plan.

If you are unsure what to do or feel overwhelmed, you can contact Business Debt line, a charity providing free, impartial debt advice and support to small business owners and self-employed people – 0800 197 6026 or www.businessdebtline.org. 

10. Where can I get advice?

This FAQ is for general guidance only and does not constitute legal advice.

If you are unsure about your position and your lender is unable to assist, you may wish to seek independent legal or financial advice before taking action.

11. How does the Voluntary Repayment Scheme fit into broader efforts to tackle Covid fraud?

The Voluntary Repayment Scheme complements broader efforts by the government and enforcement agencies, such as the Public Sector Fraud Authority, HMRC, Insolvency Service, or Police to tackle Covid fraud and recover funds.

12. What if I have already been contacted by the Public Sector Fraud Authority or other law enforcement regarding my Bounce Back Loan?

If you have already been contacted by the Public Sector Fraud Authority or other law enforcement agencies regarding your Bounce Back Loan, you must follow their instructions. You will not be eligible to take part in the Voluntary Repayment Scheme while there is ongoing enforcement or investigative action. However, you can still contact your lender directly to discuss option for repaying any outstanding loans.