The Treasury has announced that businesses which took out bounce back loans to mitigate the effects of the coronavirus pandemic will have greater flexibility to repay them, through ‘pay as you grow’ repayment options. The announcement means that borrowers will have the option to tailor payments according to their individual circumstances. Options include extending the loan period from six to ten years, making interest-only payments for six months (with the option to do so up the three times), or pausing repayments completely for six months (available once during the loan term). The pay as you grow flexibility sits on top of the existing terms which include no repayments or interest for the first 12 months. The first repayments under the scheme will start to become due in May 2021 and it remains to be seen whether the chancellor will unveil further changes to support businesses, with economic recovery likely to be subdued by the continuing pandemic.
The Treasury has announced that businesses which took out bounce back loans to mitigate the effects of the coronavirus pandemic will have greater flexibility to repay them, through ‘pay as you grow’ repayment options. The announcement means that borrowers will have the option to tailor payments according to their individual circumstances. Options include extending the loan period from six to ten years, making interest-only payments for six months (with the option to do so up the three times), or pausing repayments completely for six months (available once during the loan term). The pay as you grow flexibility sits on top of the existing terms which include no repayments or interest for the first 12 months. The first repayments under the scheme will start to become due in May 2021 and it remains to be seen whether the chancellor will unveil further changes to support businesses, with economic recovery likely to be subdued by the continuing pandemic.
