Bounce Back Loan Scheme & Pay As You Grow
The Bounce Back Loan Scheme (BBLS) is now closed to new applications, including applications for Top-Ups.
This product is no longer available and the information provided is purely for information purposes only.
Pay as you grow
Originally announced by the Chancellor of the Exchequer in September 2020, Pay As You Grow (PAYG) will enable businesses due to start repaying their Bounce Back Loans to:
- Request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%.
- Reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan.
- Take a repayment holiday for up to six months; This option is available once during the term of their Bounce Back Loan.
Borrowers can use these options individually, or in combination with each other, remaining fully liable for the debt and responsible for repaying their Bounce Back Loan in full.
Borrowers should be aware that they will pay more interest overall if they use one or more of these options, and that the length of the loan will increase in line with any repayment holidays taken.
For more information please click on the video link provided by the British Business Bank.
What are your Pay as you Grow options?
The wording below is from the British Business Bank and covers the payment of your Bounce Back Loan. We’ll send you regular reminders to let you know when your payments will start and how much you’ll pay. There’s no need to contact us, we’ll contact you with information on your payments and your options ahead of your first payment.
Option 1: You could reduce your monthly payments for six months by paying only the interest
The total amount you owe will go up. This is because your interest costs increase as you’re paying your loan over a longer period.
This option is available up to three times during the term of your Bounce Back Loan. You can also extend the term of your loan by six months at the same time (to a maximum of 10 years) to keep your payments similar to what they are now.
Option 2: You could take a payment holiday for six months
The total amount you owe will go up. This is because your interest costs increase as you’re paying your loan over a longer period.
This can be used once during the term of your Bounce Back Loan.
This means you make no payments for six months (capital or interest). You’ll still be charged interest during the six-month payment holiday and this’ll be added to the amount of your loan. As a result, your remaining loan payments will go up.
You can also extend the term of your loan by six months at the same time (to a maximum of 10 years) to keep your payments similar to what they are now.
Option 3: You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5%
Extending to 10 years would reduce your monthly payments.
You’ll accrue more interest, so the total amount payable would increase unless you pay early.
If you’re considering this option, you should think carefully about your ability to pay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
You can use options 1, 2, and 3 together if you need to.
Both option 1 and 2 will be available throughout the course of your loan term.
