More details have been announced about the 'Pay As You Grow' facility that will enable more flexible repayments on Bounce Back Loans for UK smaller businesses.
Originally announced by the Chancellor of the Exchequer in September 2020, Pay As You Grow (PAYG) will enable businesses who have started repaying their Bounce Back Loans to:
- request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
- reduce 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
- take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.
Borrowers can use these options individually or in combination with each other.
Businesses first began to receive BBLS loans in May 2020 and the first repayments will become due from May 2021 onwards. Lenders will start to communicate Pay As You Grow (PAYG) options to Bounce Back Loan Scheme borrowers three months before repayments commence.
Lenders will inform their customers about PAYG directly, so borrowers should wait until they are contacted by their lender before enquiring about the scheme.
More details available at Bounce Back Loan Scheme (BBLS) – Pay As You Grow - British Business Bank (british-business-bank.co.uk)
Posted on: Wednesday 10th February 2021