Government Announces Pay as You Grow Loan Repayments

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Business owners who took advantage of the Government’s Bounce Back Loan scheme will have more options to tailor repayments depending on their individual circumstances, it has been announced.

With over 1.4 million businesses taking part In the scheme, this flexibility will come as a lifeline for some still struggling in the wake of the COVID-19 pandemic.

Rishi Sunak, The Chancellor of the Exchequer, had this to say:

“Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.

That’s why we’re giving Bounce Back Loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.

Lenders will proactively and directly inform their customers of Pay as You Grow, and borrowers should only expect correspondence three months before their first repayments are due.”

What Does Pay as You Grow Mean for My Business?

If you’ve taken out a Bounce Back Loan for your business, you will now have the following options available to you:

  • Extend the length of the loan from six years to ten (essentially halving your repayments)
  • Make interest-only payments for six months, with the option to use this up to three times throughout the loan (so 18 months in total)
  • Pause repayments entirely for up to six months

To find out more about the Bounce Back Loan, and other support available to small business in response to the pandemic, please click here.

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