If you are an existing customer and have a query about your BBLS please contact us.

Pay as you grow

Originally announced by the Chancellor of the Exchequer in September 2020, Pay As You Grow (PAYG) will enable businesses due to start repaying their Bounce Back Loans to:  

• Request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
• Reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan.
• Take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.

Borrowers can use these options individually or in combination with each other, and remain responsible for repaying their Bounce Back Loan and fully liable for the debt.

Borrowers should be aware that they will pay more interest overall if they use one or more of these options, and that the length of the loan will increase in line with any repayment holidays taken.

For more information please click on the video link provided by the British Business Bank.

What are your Pay as you Grow options?

The wording below is from the British Business Bank, and covers the payment of your Bounce Back Loan. We’ll send you regular reminders to let you know when your payments will start and how much you’ll pay. There’s no need to contact us, we’ll contact you with information on your payments and your options ahead of your first payment.

Option 1: You could reduce your monthly payments for six months by paying only the interest The total amount you owe will go up. This is because your interest costs increase as you’re paying your loan over a longer period. This option is available up to three times during the term of your Bounce Back Loan. You can also extend the term of your loan by six months at the same time (to a maximum of 10 years) to keep your payments similar to what they are now.

Option 2: You could take a payment holiday for six months The total amount you owe will go up. This is because your interest costs increase as you’re paying your loan over a longer period. This can be used once during the term of your Bounce Back Loan. This means you make no payments for six months (capital or interest). You’ll still be charged interest during the six-month payment holiday and this’ll be added to the amount of your loan. As a result, your remaining loan payments will go up. You can also extend the term of your loan by six months at the same time (to a maximum of 10 years) to keep your payments similar to what they are now.

Option 3: You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5% Extending to 10 years would reduce your monthly payments. You’ll accrue more interest, so the total amount payable would increase, unless you pay early. If you’re considering this option, you should think carefully about your ability to pay 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.

You can use option 1, 2 and 3 together if you need to.

Both option 1 and 2 will be available throughout the course of your loan term.

BBLS key features

More about BBLS

Following the Chancellor of the Exchequer’s announcement on 27 April 2020, the Bounce Back Loan Scheme is now open for applications. Delivered by lenders accredited by the British Business Bank for this scheme, Bounce Back Loans target small and micro businesses in all sectors*, providing loans from £2k up to 25% of the business’ turnover with a maximum loan of £50k. Providing lenders with a 100% government-backed guarantee and standardising the application form is expected to lead to a faster process with many loans becoming available within days.

*Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive), public sector bodies, a state-funded primary or secondary schools and insurance companies are not eligible to apply and subject to State-Aid restrictions.

The Bounce Back Loan Scheme enables businesses to obtain a six-year term loan at a government set interest rate of 2.5% a year. The government will cover interest payable in the first year. Note: The guarantee is to the lender, not the borrower. The borrower always remains 100% liable for the debt.

• Up to £50,000 loan: Loans will be from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower.
• 100% guarantee: The scheme provides the lender with a government-backed, full guarantee (100%) against the outstanding facility balance, both capital and interest. The borrower always remains 100% liable for the debt.
• Interest rate: The government has set the interest rate for this facility at 2.5% per annum meaning businesses will all benefit from the same low rate of interest.   
• Interest paid by government for 12 months: The government will make a Business Interruption Payment to the lenders to cover the first 12 months of interest payable, so businesses will benefit from no upfront costs.
• No principal repayments for first 12 months: Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight line basis.
• No guarantee fee for businesses or lenders to access the scheme.
• Finance terms: The length of the loan is for six years but early repayment is allowed, without early repayment fees.
• No personal guarantees: No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle.

The finance hub

We are aware businesses may be worried about their finances or how to manage repayments of their Bounce Back Loan.

The British Business Bank have a range of guidance and resources available to all businesses, including content on managing cashflow and a list of independent advice services.

Please click on the Finance Hub, created by the British Business Bank, to access support and guidance around managing debt and dealing with debt.