Last week the government announced flexible repayments for Bounce Back Loans that were taken out by businesses to weather the economic storm caused by COVID-19. The scheme was introduced to enable SMEs to access vital funding throughout the coronavirus outbreak and it was announced in December 2020 that the scheme would be extended until 31 March 2021. The flexibilities that have been introduced by the Pay As You Grow Scheme have been welcomed by businesses across the country.
From gov.uk regarding the announcement:
The Chancellor of the Exchequer, 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.”
Lenders will proactively and directly inform their customers of Pay as You Grow, and borrowers should only expect correspondence three months before their first repayments are due.
It will provide businesses with the following options:
- Extend the length of the loan from six years to ten
- Make interest-only payments for six months, with the option to use this up to three times throughout the loan
- Pause repayments entirely for up to six months
Business Secretary, Kwasi Kwarteng, added:
“The comprehensive and generous financial support package we have delivered across the UK has protected jobs, saved businesses and kept local economies on the move.
“While our vaccine rollout is moving at an incredible pace and the end is in sight, we know times are still tough for many companies and extra support is needed.
“These flexible repayment options will give businesses the time they need to recover from the pandemic before paying back loans, giving them the breathing space and confidence to build back better.”
Sean Husband, director of My Debt Recovery, said: “The My Debt Recovery team are pleased to see even further steps being taken by the government to protect SMEs, the lifeblood of British business, during this pandemic. By enabling greater repayment flexibility for Bounce Back Loans, businesses can be more in control of where their cash flow is headed and be more agile with their finances. We have seen first hand, from dealing with both creditors and debtors, how difficult it has been for businesses that have been impacted by the pandemic to plan their cash flow from one month to the next and prioritise who to pay and when. These new repayment options will help organisations to take the time that they will need to recover once the country begins to open up after this current lockdown.”
If you need some help with your cash flow, a member of our experienced team will be happy to help you. We are experts at helping businesses with their corporate debt recovery and improving their cash flow as a result. We work on a no collection, no fee basis. Call us today: 0800 009 6106