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Bounce Back Loan – Apply or Top Up

23 February

Applications now open until March 31st 2021

About the scheme

 The Bounce Back Loan Scheme (BBLS) provides financial support to businesses across the UK that:

  • are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak
  • can benefit from £50,000 or less in finance.

The scheme is a part of a wider package of government support for UK businesses and employees.

Note: As of 17 December 2020, the Government has announced that BBLS will be extended until 31 March 2021.

It was also announced that, from 10 November 2020, participating lenders in the scheme can offer smaller businesses across the UK a ‘top-up’ to their existing Bounce Back Loan if they originally borrowed less than the maximum amount available to them.

On Saturday 6 February 2021, the Chancellor of the Exchequer announced further details about Pay As You Grow,  (scroll down for details of PAYG), to support UK smaller businesses that have taken out a Bounce Back Loan to manage their cashflow and have a better chance of getting back to growth.

How it works

BBLS is available through a range of British Business Bank accredited lenders and partners, listed on the British Business Bank website.

A lender can provide a six-year term (can be extended to 10 years) loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.

The scheme gives the lender a full (100%) government-backed guarantee against the outstanding balance of the facility (both capital and interest).

 The borrower always remains fully liable for the debt.

For more details and how to apply see the British Business Bank

Pay As You Grow (PAYG)

PAYG will enable businesses who have started 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.

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.

Lenders will start to communicate Pay As You Grow (PAYG) options to Bounce Back Loan Scheme borrowers three months before repayments commence.

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