In a recent announcement, the government has stated that it will allow greater flexibility for businesses that took out Bounce Back Loans, as a means to get through the coronavirus pandemic. Those businesses now have the option to tailor their payments according to their individual needs.
The Chancellor’s Pay as You Grow repayment plan will be available to over 1.4 million businesses who used the Bounce Back Loan Scheme. Through the scheme, nearly £45 billion was paid out to struggling businesses.
The Pay as You Grow repayment plan will now offer the option to delay payments for a further six months. This will allow for businesses to choose the option of making no payments on their loan until 18 months after the original loan date. Borrowers will also have the option to pause repayments from their first repayment, rather than after six repayments.
The Pay as You Grow repayment plan will allow borrowers to extend their loans from six to ten years, which will reduce monthly repayments by almost 50%. There will also be an option to make interest-only payments for six months. This is in addition to the government covering the first year of interest on the loan.
Lenders will start informing borrowers of their options, three months before their first payment is due.
Further information can be found on the government website.