The bounce back loan scheme was introduced to help small businesses across the UK who were missing out on income due to the effects of both COVID and lockdown. And also to provide income support for those who had no income stream such as those who are self-employed and limited company directors. The scheme eventually closed to applications on the 31st of March this year. However, an extension to the bounce back loan scheme which affects repayments has been announced.
The government have announced that businesses who have taken out bounce back loans will be able to tailor their payments in accordance with their individual circumstances. The tailored repayment system is known as ‘Pay As You Grow’ and will be made available to over 1.4 million businesses across the UK. Who, between them, took out over £45billion through the scheme.
If you are one of the 1.4m businesses that are eligible for the pay as you grow scheme. You will be given the following options-
- The option to extend the length of your loan from 6 years to 10.
- Make interest-only payments for six months. And the ability to activate this option up to three times throughout the loan.
- Pause any repayments on your loan altogether for up to 6 months.
A flat extension for everyone of an extra six months who has taken out a bounce back loan. Beforehand, this meant that businesses who had taken out the loans had 12 months from when the loan was taken out whereby they didn’t have to make any repayments. However, this has now been extended to 18 months.
The purpose behind this extension to the bounce back loan repayment scheme is to give these businesses more time to grow and recover so they will be in a better position to make these payments. With Chancellor Rishi Sunak stating that “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.”
Want to know more?
If you want to know more about what your businesses options are if you’ve taken out a bounce back loan, we’re here to help. Here at D&K Accounting, we’re a team of profit-first professionals with experience in helping businesses across the UK both prior to the pandemic and throughout the pandemic itself.