Bounce Back Loan Scheme (“BBLS”) Print
The BBLS was introduced to enable businesses to access finance more quickly during the coronavirus outbreak. Bounce Back loans of up to £50,000 have been provided by a number of accredited lenders for a term of up to 6 years to support businesses which were losing revenue and seeing their cashflow disrupted as a result of the coronavirus. The scheme was supported by a 100% government backed guarantee. Although the BBLS closed to new applicants and applications for top-ups on 31 March 2021, businesses which commence paying back their Bounce Back loans may, under Pay As You Grow (“PAYG”) request an extension of their loan term from 6 years to 10 years, and retain the fixed interest of 2.5% for the whole term. In addition, under PAYG the borrower may:
- Reduce monthly payments by paying interest only for 6 months. This may be done up to three times during the term of the Bounce Back loan;
- Take a repayment holiday for up to 6 months. This option is only available once during the term of the loan.
Businesses first commenced receiving Bounce Back loans in May 2020, and the first repayments will become due from May 2021 onwards, Lenders should start communicating automatically with the borrowers regarding PAYG three months before repayment commences.