Businesses that took out government-backed Bounce Back Loans to get through Covid-19 will now have greater flexibility to repay their loans.
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 ten years (reducing monthly repayments by almost half), make interest-only payments for six months or pause repayments for up to six months.
The Chancellor has now extended the flexibility of the third option, which will now be available to all from their first repayment (rather than after six repayments have been made). This will mean that businesses can choose to make no payments on their loans until 18 months after they originally took them out.
These Pay as You Grow options will be available to more than 1.4 million businesses which took out a total of nearly £45 billion through the Bounce Back Loan Scheme.
This is in addition to the government covering the costs of interest for the first year of the loan.