Pay as You Grow options enables more flexible Bounce Back Loan Scheme repayments
- Penny Mordaunt MP
- Feb 8, 2021
- 2 min read
Today I have received this welcome update on the Pay As You Grow scheme:
Dear Ms Mordaunt,
Pay as You Grow options enables more flexible Bounce Back Loan Scheme repayments
On Saturday 6 February 2021, the Chancellor announced further details of Pay as You Grow, a series of measures designed to give businesses more time and flexibility to repay their Bounce Back Loan following their initial 12-month repayment free period. The British Business Bank, who administers the scheme on behalf of Government, would like to ensure that you and your staff have all the information you need on Pay as You Grow to support your constituents as their first repayments become due.
The first Bounce Back Loan Scheme recipients, who received their loan in early May 2020, will be required to make repayments from May 2021, 12 months after the first loans were offered under the scheme. From May 2021 onwards, borrowers with repayments due will be able to make use of each of the following three options:
a full repayment holiday for up to six months at any point during the loan term. This option is available once during the term of their Bounce Back Loan
an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
a reduction of their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan.
You and your constituents can find more information about Pay as You Grow on the British Business Bank’s website: https://www.british-business-bank.co.uk/new-pay-as-you-grow-facility-will-enable-more-flexible-repayments-on-bounce-back-loans-for-uk-smaller-businesses/.
Businesses who have concerns regarding repaying debt should contact their lender and can find additional links to resources on the British Business Bank’s Finance Hub.
The Bounce Back Loan scheme provides financial support to businesses across the UK that are seeing their cashflow disrupted as a result of the Covid-19 pandemic. Since May 2020, the scheme has supported nearly £45bn of loans to 1.5m businesses.
If you would like any further information on Bounce Back Loans or Pay as You Grow, please contact BBBGovernmentRelations@british-business-bank.co.uk.
Best wishes,
James Shipp
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