Bounce Back Loan

15 Jan

The bounce-back scheme that is being provided by the government provides a loan between £2000 and £50000 along with the government giving the lenders of the loan a guarantee of 100% the loans they payout. Small business owners will not have to worry about paying any bank fees or interest for the first year because the government will be picking up the bill for this in the first 12 months. However, after the first year, there will be an interest rate of 2.5% for the remaining period for the loan.

There were changes made and announced by the government in 2020 regarding Bounce Back Loans, these included:

· New and existing loans can be repaid over 10 years, rather than six

· You can take one payment holiday lasting six months, but you have to have made six payments to use this option

· You can choose to make interest-only repayments three times over the course of the loan, with each interest-only period lasting up to six months

However, it is important to remember that any extension to your loan as well as payment holidays or interest-only payments means that you will end up paying more interest overall.

After the November lockdown announcement the government has stated that any business that has borrowed less than the maximum being 25% of turnover can top up their loan, this option can only be used once.