The government launched the Bounce Back Loan Scheme (BBLS) on May 4th to ensure that the smallest businesses can access loans of up to £50,000 in a matter of just days. As of 13 December, the scheme had supported more than 1.4 million businesses with facilities in excess of £43.5 billion.
With the government covering repayments for businesses for the first-year repayments for BBLS loans won’t begin until June 2021 at the earliest. The Pay as you Grow options announced by the Chancellor will enable businesses to repay their Bounce Back Loans on the terms which work best for them, giving them more time to repay and giving them the flexibility they may need to help their business recover and grow. This includes the ability to extend the term of the loan from 6 to 10 years (reducing average monthly payments by almost half), as well as the option to temporarily switch to interest-only payments or to take a full repayment holiday for 6 months.
We have always been clear that these are loans and not grants, and that businesses are of course expected to make every effort to repay the loans, as is only right as the taxpayer stands behind these loans.
The Government recognises the significant challenges facing businesses due to the COVID-19 pandemic and has responded to this with an unprecedent package of business support. These support measures include, but are not limited to: The Coronavirus Job Retention Scheme (CJRS), A 12-month business rates holiday for all eligible retail, leisure and hospitality businesses in England, Cash grants of up to £3,000 per month to help businesses that are closed with their costs, including paying their supply chains, and a VAT deferral for up to 12 months.