Bounce Back Loan Scheme
(asked on 28th January 2021) - View Source
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment the Government has made of the effect on independent retailers of the repayment of bounce back loans before the end of the covid-19 lockdown.
The Government launched the Bounce Back Loan Scheme (BBLS) to ensure that the smallest businesses could access loans of up to £50,000 to help businesses through this difficult period. Under BBLS no repayments are due from the borrower for the first 12 months of the loan, giving businesses the breathing space they need during this difficult time. In addition, the Government covers the first 12 months of interest payments charged to the business by the lender.
We have always been clear that businesses are responsible for repaying any finance they take out. However, we recognise that some borrowers will benefit from flexibility for their repayments. That is why we announced the Pay As You Grow measures.
Pay As You Grow will provide Bounce Back Loan borrowers more time and flexibility over their repayments by giving them the option to:
- Extend the length of the loan from six years to ten.
- Make interest-only payments for six months, with the option to use this up to three times throughout the loan.
- Once six payments have been made, have the option of a six-month repayment holiday.
Businesses will be able to use these options either individually or in combination with each other. In addition, they have the option to fully repay their loan early and will face no early repayment charges for doing so.
Together, the 12-month payment holiday and interest-free period for borrowers, along with the Pay As You Grow measures, provide a generous support package giving businesses the time to get back on their feet.
The Government continues to enhance its engagement with a broad range of trade and representative bodies, in particular SME networks, to continue to understand the impact of Covid-19 on businesses and the concerns they have.