Businesses that took out government-backed Bounce Back Loans to get through Covid-19 will now have greater flexibility to repay their loans, the government has announced.
Pay as You Grow offers the option to tailor payments according to your circumstances. Options include:
- extending the length of the loan from 6 to 10 years;
- making interest-only payments for six months;
- pausing repayments for up to six months.
This is in addition to the government covering the costs of interest for the first year of the loan.
The government has confirmed that lenders will reach out to borrowers to provide information on repayment schedules and how to access flexible repayment options. They have also made clear that lenders are expected to offer pay as you go options to all borrowers under the Bounce Back Loan Scheme.
Under the Bounce Back Loan Scheme, no repayments or interest are due from the borrower during the first 12 months of the loan term.