The government has announced that businesses who took out Bounce Back loans to get through the pandemic will have greater flexibility to pay back what they borrowed. Pay as you grow will allow borrowers the option to tailor payments according to their individual circumstances and delay repaying for a further 6 months.
Pay As You Grow at a glance
- The option to tailor repayments to your individual circumstances
- The option to delay all repayments for a further six months
- The option to pause repayments completely for 6 months from the first repayment (rather than after six repayments)
- The option to extend the term of the loan from six to ten years (reducing payments by almost 50%)
- The option to make interest-only payments for 6 months
Key to the Chancellor’s Pay As You Grow initiative is the option to delay making any repayments on the Bounce Back Loan for a further six months. This means that businesses can choose not to pay anything back for a total of 18 months after taking out the loan. The option to pause repayments will also now apply from their first repayment, rather than after six repayments as originally planned.
The options under Pas As You Grow will be available to the more than 1.4 million businesses that borrowed a total of nearly £45 billion in loans from the government.
The government expects all lenders to offer Pay As You Grow options to their customers. Lenders will begin reaching out to borrowers from this week to provide information on how they can access the scheme.
You can read the full announcement from the government here