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09 Feb 2021

New flexibility for repaying Bounce Back Loans announced

Retailers that took out government-backed Bounce Back Loans to get through Covid-19 will now have greater flexibility to repay their loans, it has been announced.

Bounce Back Loan borrowers will now have the option to tailor payments according to their individual circumstances, with the option to delay all repayments for a further six months - meaning businesses can choose to make no payments on their loans until 18 months after they originally took them out.

The Pay as You Grow scheme will be available to more than 1.4 million businesses, which collectively took out nearly £45 billion through the Bounce Back Loan Scheme.

s300 Pay As You Grow GOV-01

Pay as You Grow will also enable borrowers to extend the length of their loans from six to 10 years (reducing monthly repayments by almost half) and make interest-only payments for six months, in order to tailor their repayment schedule to suit their individual circumstances.

This is in addition to the Government covering the costs of interest for the first year of the loan.

Lenders will begin to contact borrowers to provide information on repayment schedules and how to access flexible repayment options.

Chancellor of the Exchequer  Rishi Sunak said: "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."

Read the Government's statement here.

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