Bounce Back Loan Scheme: Repayments

Department for Business, Energy and Industrial Strategy written question – answered on 14th July 2021.

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Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton

To ask the Secretary of State for Business, Energy and Industrial Strategy, whether he made an assessment of the potential merits of delaying bounce back loan repayments for 12 months to enable local businesses to recover from the covid-19 outbreak.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

We have always been clear that businesses are responsible for repaying any finance they take out. However, we recognise that some borrowers will benefit from additional flexibility with regards to their repayments. That is why we announced the Pay As You Grow measures last year.

Pay As You Grow is designed to provide Bounce Back Loan borrowers more time and flexibility over their repayments by giving them the option to:

  • Extend the length of the loan from six years to ten.
  • Make interest-only payments for six months, with the option to use this up to three times throughout the loan.
  • Take up a six-month repayment holiday. This option is available once during the term of their loan.

Businesses are able to use these options either individually or in combination with each other. These are only available once a business has started making repayments on the loan. In addition, they have the option to fully repay their loan early and will face no early repayment charges for doing so.

The British Business Bank has a range of guidance and resources available to all businesses, including content on managing cashflow and a list of independent advice services. Details can be found at: https://www.british-business-bank.co.uk/finance-hub/dealing-with-debt/.

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