Bounce Back Loan Scheme (BBLS) is one of many measures the government has introduced since March to reduce pressure on business finances amid the COVID19 chaos, allowing businesses to manage their costs and protect jobs.
Business owners who borrowed loan through the Bounce Back Loan Scheme (BBLS) will now be offered a new government repayment system. ‘Pay as You Grow’ is a flexible scheme for borrowers using which they can increase the timespan of their loan period from 6-years to 10-years expecting to reduce their monthly repayment amount. The new system will also come up with the options of interest-only periods of 6-months and payment holidays for borrowers.
BBLS has provided £38 billion of finance through more than a million loans to UK-based small businesses,24 many of which had not lent earlier. Loans provided are between £2,000 and £50,000, capped at 25% of turnover, with a 100% government guarantee to the lender to help them with the confidence they need to support the smallest businesses. The borrower will not have to repay for the first 12-months, with the government covering the first 12-months’ interest payments.
Moreover, the government has announced more flexibility to the Coronavirus Business Interruption Loan Scheme. This allows lenders to increase the timespan of their loan period from 6-years to 10-yeats. Applications can be made for the scheme until the end of November.
The flexibility to repay these loans over a longer period helps businesses’ specific requirements better.