Did you know that there are a number of things businesses can do to reduce their Bounce Back Loan repayments.
It would seem that a large number of businesses repaying Bounce Back Loans (BBLS) are not aware they have options under “Pay As You Grow”. According to recent data released by the government so far only 28% of businesses have accessed one or more of the pay as you grow options for their BBLS.
Bounce Back Loan Pay As You Grow
When the Bounce Back Loan Scheme was originally announced in spring 2020, businesses could borrow up to £50k repaid over 6 years. This was to help SME’s survive Covid and the economic impact of restrictions.
However later that year when it was obvious that the pandemic would go on for much longer, the pay as you grow initiative was announced.
According to the British Business Bank the Pay As You Grow scheme allows businesses with a Bounce Back Loan to do the following:
- Extend the term from 6 years to 10 years (same interest rate)
- Pay Interest Only For 6 Months, up to 3 times
- Take one 6 month repayment holiday
Its worth noting that doing any of the above will make it take longer to repay your BBLS and means you will pay more interest.
However if your business is struggling with repayments, it may be better to use these options than go into default. Figures released in July 2022 show that currently 7% of Bounce Back Loans are in arrears and 4% in default.
The scheme is explained in more detail in this video from the British Business Bank:
How To Apply For Pay As You Grow?
To apply for one of the pay as you grow repayment reductions, you need to contact whoever provided your bounce back loan.
In most instances this will be your business bank account provider.
Here are some more details from some of the BBLS providers:
- Lloyds Pay As You Grow
- NatWest Pay As You Grow
- RBS Pay As You Grow
- Bank of Scotland Pay As You Grow
- TSB Pay As You Grow
- Starling Pay As You Grow
- Barclays Pay As You Grow
- HSBC Pay As You Grow
FAQ: Bounce Back Loan Repayments
Lets look at some common questions we get asked about the Bounce Back Loan Scheme and what the repayment options are:
Yes you can reduce your bounce back loan repayments using the Pay As You Grow options. These include extending the term from 6 years to 10 years, having a one off 6 month payment holiday or paying 6 months interest on up to three occasions.
Yes, if you have not already done so, you can request a one off payment holiday for 6 months. This is offered by all banks as part of the governments Pay As You Grow Scheme. Contact your bank to request this.
Yes payment holidays are permitted for 6 months on a bounce back loan. This can only be requested once as part of the Pay As You Grow scheme announced by government. You need to contact whichever bank issued your bounce back loan.
Speak To a Commercial Finance Broker
The bounce back loan scheme is now closed but there may be other finance options for your business.
As an independent commercial finance options we can look at what other funding options are available for your business.
Call us on 0161 5469128 or fill in the form below: