Winter Economy Plan
The Chancellor has set out a package of measures to support public services, people and business through disruption caused by COVID-19.
Bounce Back Loan Scheme (BBLS)
BBLS has provided £38 billion of finance through more than a million loans to UK-based small businesses, many of which had not previously borrowed. Loans are between £2,000 and £50,000, capped at 25% of turnover, with a 100% government guarantee to the lender to provide them with the confidence they need to support the smallest businesses.
The borrower does not have to make any repayments for the first twelve months, with the government covering the first twelve months’ interest payments. Under the new Pay as you Grow options (see below), Bounce Back Loan borrowers will all be offered the choice of more time and greater flexibility for their repayments
Flexibility to pay back Bounce Back Loans
Businesses who took out a Bounce Back Loan will be offered more flexibility in their repayments through a new Pay as You Grow system.
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments). These changes will provide greater flexibility to repay these loans over a longer period and in a way that better suits businesses’ individual circumstances.