Bounce Back Loans – Pay as You Grow
The Chancellor Rishi Sunak has announced further measures to support businesses as firms look to start moving forward whilst still hampered by the continuing impact on trade of Covid-19.
Originally Bounce Back Loans were to be interest and repayment free (supported by the Government) for a period up to 12 months, with loans then continuing for a further a 5 years with the borrower covering both the repayments and interest.
Recognising the pandemic has continued longer than originally anticipated further support has now been announced:
Loans can now be repaid over a period of up to 10 years (originally a maximum of 6)
Payments can be paused for up to 6 months from when repayments were due to start (previously had to make 6 payments before being eligible to request a payment break)
Interest only repayments can made for up to a another six months on top of paused payments.
It should be noted that overall repayments will go up in total, as interest will still be charged over the period however, as businesses recover over time, as the pandemic eases, business cashflow will be supported by the opportunity to reduce monthly payments and manage cashflow more effectively.
Lenders will contact borrowers to inform them of these options, but possibly only three months before they are due to start making repayments.