Repaying your Bounce Back Loan and Pay As You Grow (PAYG) options
If you no longer need the Bounce Back Scheme loan, you can choose to pay it back early and you’ll then pay less interest and there are no early repayment charges.
Pay As You Grow
The Government announced Pay As You Grow options for Bounce Back Loan borrowers to help businesses get back to regular trading in 2021. Pay As You Grow could give you more time and flexibility to pay back your loan.
Pay As You Grow options have been available to you since you started to repay your Bounce Back Loan. We wrote to you before you made your first repayment to explain your options in more detail .
Using these options won’t affect your credit score, or negatively affect your credit file. We may use requests for Pay As You Grow options to help us assess affordability in future lending applications, for example we will take into consideration incomings and outgoings, including existing debt repayments such as the Bounce Back Loan, and also your total debt exposure, which will include the outstanding Bounce Back Loan.
The options available to you are as follows:
If you expect to be in a better position to repay in the future:
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You could reduce your monthly repayments for six months by paying interest only.
- This option is available up to three times during the term of your Bounce Back Loan.
OR:
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You could take a payment holiday for six months.
- This option is available once during the term of your Bounce Back Loan.
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If you’re only able to repay a smaller amount:
You could request an extension of your loan term from six years to ten years at the same interest rate of 2.5%.
If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
Please note for all three options that the total amount you owe will go up. This is because your interest costs increase as you’re repaying your loan over a longer period.
You can use options 1 and 2 together if you need to.
We’re here to help
You do not need to contact us in advance. We will send you a repayment schedule outlining your options, around three months before your first payment is due.
However if you’re worried about your finances, please phone us on 0345 600 5925. Lines are open 9.00- 17:00 Monday-Friday, excluding bank holidays. (Call charges may vary, please refer to your service provider.) Or for further support please see My business is facing difficulty.
Practical information is also available through a number of free and confidential services:
- FCA- Dealing with financial impact of rising costs of living
- MoneyHelper Phone 0800 138 7777, lines are open 8am-6pm Monday-Friday, excluding bank holidays or you can visit the MoneyHelper website.
Other business finance support options
In addition, the British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.
Reminder of your Bounce Back Loan terms and conditions
When you applied for your Bounce Back Loan, you declared that you understood that:
- You are fully liable for all repayments, and if you are unable to meet these obligations, this could negatively affect your credit score.
- The 100% government guarantee is provided to cover any losses the lender makes and does not cover any losses that you might suffer if you are unable to meet your payment obligations.
- We would not carry out any affordability checks on your application.
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