If your business took out a Bounce Back Loan and you are worrying about paying it back, on the 8th of February the Chancellor announced the Pay as You Grow Scheme is offering support to delay all repayments for a further six months.
Am I eligible to extend my Bounce Back Loan repayments?
The Pay As You Grow options will be available to more than 1.4 million business which the government have made clear that all lenders are expected to offer the PAYG options to all borrowers under the Bounce Back Loan Scheme so check with your lender that these options are available to you. However, you should receive correspondence from your lender three months before your first repayment is due.
What does this mean for me?
- If this applies to your business this now includes the option to delay all repayments for a further six months, meaning you can choose to make no payments until 18 months after you took the loan out. For example, if you took your Bounce Back Loan out in June 2020 you now have until January 2022 to make your first payment.
Are there any other ways I can tailor my Bounce Back Loan repayments?
- Pay As You Grow also gives the option for you to extend the length of your loan from 6 years to 10 years, at the same interest rate, reducing your monthly payments by half.
- You can also choose to make interest only payments for 6 months, with the option to use this up three times throughout the loan.
- If you are really struggling and worrying about your Loan Repayments reach out to your lender, the Finance Conduct Authority has rules which require lenders to show due consideration and appropriate forbearance to borrowers in difficulty.
- However, do be aware that you will pay more interest overall if you use one or more of these options and the length of the loan will increase in line with any repayment holidays that you make take.
If you have any concerns or any questions please contact us and speak to our team, we are here to help.