In May 2020, the Government launched the Bounce Back Loan Scheme (Scheme) to support certain businesses affected by Covid-19. The Scheme allowed small firms to obtain loans of up to £50,000, interest-free for the first 12 months. With repayment dates looming and businesses still affected by the latest national lockdown, the Government has announced some changes.
Under the new arrangements, borrowers under the Scheme will have the following options:
- To extend the length of the loan from six to ten years.
- To pause repayments entirely for up to six months.
- To make interest-only payments for a period of six months, which option can be used three times during the loan term.
Gov.uk advises that lenders who have provided loans under the Scheme will contact their borrowers before repayments are due to discuss extension options. For further details of the Scheme, please visit the Government website here.