Bounce Back Loans: New Payment Options

If you took out a Government-backed ‘Bounce Back Loan’ amidst the Covid crisis, you now have greater flexibility with regards repayments.

If you are one of the businesses who took out a government-backed Bounce Back Loan to see yourself through the COVID crisis; you now have greater flexibility to repay your loan. Here’s everything you need to know…

Businesses given extra six months to repay Bounce Back Loans

Bounce Back Loan borrowers have now been afforded the option of tailoring payments in line with their individual circumstances – giving them the option to delay payments for an additional 6 months.

The Chancellor’s new, ‘Pay as You Grow’ repayment scheme will now be available to over 1.4 million businesses; who collectively have borrowed almost £45bn via the Bounce Back Loan scheme.

Chancellor Rishi Sunak said:

“Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.

That’s why we’re giving Bounce Back Loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.”

Benefits of the recent changes:

  • Businesses can choose to make no payments on their loans until 18 months after they originally took them out.
  • The option to pause repayments will now be available to all from their first repayment, rather than after six repayments have been made.
  • Borrowers can also extend the length of their loans from 6 to 10 years and make interest-only payments for 6 months.
  • You now have until 31 March 2021 to apply
  • You can borrow between £2,000 and £50,000
  • You can ‘top up’ your bounce back loan

Get the full details here

Need help?

Cottons London is a branch of Cottons Chartered Accountants. If you are due to start repaying a Bounce Back Loan and have any questions about the upcoming payments or the impact that these payments might have on your business, then please get in touch here.

For the full official guidance on this from HMRC, click here.

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