Borrowers will now have the option to tailor payments according to their individual circumstances, giving them more time to repay.
The Chancellor’s Pay as You Grow repayment flexibilities now include the option to delay all repayments for a further six months, this means businesses can choose to make no payments on their loans until 18 months after they took them out. Previously, the option to pause repayments was only after six repayments were made, now it is available to all from their first repayment.
Borrowers can also extend the length of their loans from six to ten years, which would reduce their monthly repayments by half, and they can make interest-only payments for six months, enabling them to tailor their repayment schedule to suit individual circumstances.
Lenders will reach out to borrowers to provide information on repayment schedules and how to access flexible payment options which will provide businesses with:
- The option to 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 payments entirely for up to six months.
For businesses who are considering taking out a Bounce-Back Loan, have until 31 March 2021 to apply. The criteria for the loan remains the same; the company, partnership or sole trader must be:
- Based in the UK;
- Adversely affected by Covid-19;
- Established prior to 1 March 2020.