The Chancellor announced yesterday that businesses who have taken out government-backed Bounce Back Loans will now have greater flexibility to repay them, allowing them to delay repayments for a further six months.
Over 1.4million businesses collectively borrowed almost £45 billion through the Bounce Back Loan scheme and the new flexibilities offers borrowers the chance to tailor repayments to their individual circumstances.
What are the options?
Pay as You Grow will offer businesses to:
- Extend the length of the loan from six years to ten,
- Make interest-only payments for six months, with the option to use this up to three times throughout the loan,
- Delay repayments entirely for up to six months.
This comes in addition to the government covering the costs of interest for the first year of the loan, which they announced in September.
Lenders will now be contacting businesses who took out the Bounce Back Loans providing information on how to access these flexible repayment options. These will give many businesses extra time for recovery.
The deadline to apply for Bounce Back Loans was extended to 31 March 2021 and the Furlough scheme, extended to 30 April 2021. (For more details, see our earlier blog).
How can we help?
We expect the next phase of the Covid-19 economic support to be formally announced as part of the Budget on 3 March 2021. In the meantime, if you have new business concerns following the latest updates, or would like help navigating the support you can access, contact your usual relationship practitioner, email email@example.com or call us on 0161 905 1616.