Businesses that have been negatively impacted by Covid-19 can still apply for Bounce Back Loans of up to £50,000, after the Government announces greater flexibility for re-payments.
The scheme was launched in April last year, and there were no repayments due in the first year of the loan and the first year’s interest was covered by the Government. Repayment of the first loans will commence in May 2021, and the Chancellor has announced flexibility on the terms of repayment, to be known as ‘Pay as You Grow’.
All lenders will offer Pay as You Grow options to borrowers allowing them to:
- Extend the length of the term from six years to ten, reducing monthly repayments by almost half
- Make interest-only payments for six months, and to do this up to three times during the term
- Pause re-payments entirely for up to six months once during the term
- The interest rate is fixed at 2.5 per cent for the term of the loan.
Shanette Goodwin, Associate Director, said: “The terms of Bounce Back Loans have changed and are now more favourable for the borrower.
“We would encourage any business considering a Bounce Back Loan to check their eligibility ahead of the March 31 deadline to avoid missing out. Those who did not take the full amount they were eligible for may also be entitled to a top-up.
“Lenders will contact borrowers directly three months before repayments are due to commence.
“They will provide identical information on how to access flexible repayment options under Pay as You Grow, and borrowers will be able to tailor their repayment schedule to suit their individual circumstances.”
Businesses are able to apply to borrow up to 25 per cent of turnover in the 2019 calendar year, to a maximum of £50,000. Eligibility criteria apply.
Further details can be found here.