These schemes were originally put in place to support businesses’ cashflow requirements during the pandemic. Given the current uncertainty businesses face, a number of changes have been put in place designed to provide further support.
Extended deadline for applications
The schemes were originally due to close for new applications at the end of September. The deadline for applications has now been extended to 30 November 2020.
Extended repayment terms
The repayment terms for both schemes have also been extended from the original six years to 10 years.
Introduction of flexible repayment schedules
The Bounce Back Loan Scheme is being rebranded as “Pay as you Grow”.
Alongside the extended repayment terms, businesses who are struggling will have the option to apply for interest only repayments for six months, or even payment holidays of up to six months – suspending repayments altogether during this time.
Businesses will be able to take advantage of interest only payments up to three times during the repayment term. Payment holidays can only be utilised once and only after the business has made six payments.
Ultimately therefore it sounds like repayments will have to commence a year after the loan was originally taken out for at least the first six months, be it for a lesser amount than that originally anticipated.