The Government have announced greater flexibility for repaying loans through its new ‘Pay As You Grow’ scheme.
The Government recognise that many of the one million small businesses who have benefitted from the loan schemes have never borrowed finance before. That is why the Government want to give them greater flexibility to repay these loans over a longer period and in a way which suits their circumstances.
All borrowers will now have the option to repay their Bounce Back Loans over a longer time period by extending the term of BBLs to ten years – this will reduce their average monthly repayments by almost half.
On an average £30,000 loan, this reduces the monthly payment from £532 to £309. Businesses will also be able to move to interest-only repayments for periods of up to six months – or to pause repayments entirely for the same period. It will have no impact on a business’s credit rating if they take up any of those options. And the Government will also allow CBILS lenders to extend their loans to ten years as well by extending our government guarantee, providing more flexibility and support for businesses.