Businesses that took out government-backed Bounce Back Loans to get throughCovid-19 will now have greater flexibility to repay their loans, the government has

announced

Bounce Back Loan borrowers will now have the option to tailor payments according to

their individual circumstances with the option to delay all repayments for a further six

months.

Pay as You Grow will be available to over 1.4 million businesses, which collectively took

out nearly £45bn through the Bounce Back Loan Scheme.

The Treasury’s Pay as You Grow repayment flexibilities enable borrowers to tailor their

repayment schedule, with the option to extend the length of their loans from six to 10

years (reducing monthly repayments by almost half), make interest-only payments for six

months or pause repayments for up to six months.

These Pay as You Grow (PAYG) options will be available to more than 1.4 million

businesses which took out a total of nearly £45bn through the Bounce Back Loan

Scheme. Businesses first began to receive the loans in May 2020 and the first

repayments will become due from May 2021 onwards.

This is in addition to the government covering the costs of interest for the first year of the

loan.

The government has confirmed that lenders will reach out to borrowers to provide

information on repayment schedules and how to access flexible repayment options.

It will provide businesses with the following options:

 extend the length of the loan from six years to 10 at the same fixed interest rate

of 2.5%;

 make interest-only payments for six months, with the option to use this up to

three times throughout the loan; and

 Pause repayments entirely for up to six months. This option is available once

during the term of the Bounce Back Loan.

Under the Bounce Back Loan Scheme, no repayments or interest are due from the

borrower during the first 12 months of the loan term.

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