Will you welcome greater flexibility in repayment of your bounce back loan?
Businesses that took out government-backed Bounce Back Loans to get through Covid-19 will now have greater flexibility to repay their loans, the government has announced.
Chancellor Rishi Sunak said: ‘Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.
‘That’s why we’re giving Bounce Back Loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.’
These ‘Pay As You Grow’ options include:
• extend the length of the loan from six years to 10 at the same fixed interest rate of 2.5%;
• make interest-only payments for six months, with the option to use this up to three times throughout the loan; and
• pause repayments entirely for up to six months. This option is available once during the term of the Bounce Back Loan.
The government is clear that all lenders must offer these flexible repayment options for all loans taken out under the scheme, individual lenders should be contacting their customers before loan repayments begin as the disruption to business continues.