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Save money on your Bounce Back Loan!
What is it?
The Chancellor has announced new ways for your Bounce Back Loan (BBL) repayments to become more flexible.
These are the “Pay as You Grow” options, and will help to protect businesses though the COVID-19 pandemic, and the vaccine roll out.
The BBL scheme has lent £45 billion to over 1.4 million businesses and is aimed at supporting small and medium-sized businesses through the pandemic.
The loan length has been extended from six years to ten years, meaning the monthly repayments have been nearly halved.
You can make interest-only payments for six months, and you can use this option three times throughout the length of the loan.
You can pause repayments entirely for up to six months, and this option can be used straight away, meaning the first repayment will be after 18 months.
If you wish to use the Pay as You Grow options, you must actively inform your lender.
But i haven’t got a bounce back loan
The deadline to apply for the BBL has been extended to the 31st March 2021.
The new details are as follows:
- ten-year term loan, but early repayment is allowed
- The Government will cover the first year of interest payments
- From £2,000 to either £50,000 or 25% of the business’ turnover, whichever is lower
- No guarantee fee for businesses or lenders to access the scheme
- No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle
- 100% guarantee from the government against the outstanding balance.
- The Borrower remains 100% liable for the debt
Is my business eligible?
To apply for the loan the business must self-certify that:
- Your business is UK based and established by 1st March 2020
- The business has been adversely impacted by the Coronavirus
- The business is not using a government back-loan scheme (unless using the BBL to refinance a whole facility)
- Business is not bankrupt, in liquidation, or undergoing debt restructuring.
Credit institutions, public sector institutions, state-funded schools and insurance companies cannot apply for the Bounce Back Loans.
How do I apply?
Businesses should check the link to the British Business Bank website to find out which lenders provide bounce back loans.
Kind regards Ilyas