Coronavirus Business Interruption Loan Scheme

(asked on 19th February 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of (a) extending the application date for the Coronavirus Business Interruption Loan Scheme and bounce back loans for 12 months and (b) delaying the repayment start date for people who have already received this support for an additional 12 months.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 1st March 2021

The end date for new applications under Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) has already been extended several times, ensuring businesses have more time to make loan applications, supporting them through the pandemic. The Government is continuing to work to introduce a new, successor loan guarantee scheme, set to begin in early April, following the closure of the existing schemes to new applicants on 31 March 2021.

In order to give the smallest businesses further support and flexibility in making their repayments for BBLS, the Chancellor has announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their BBLS facility over ten years. This will reduce businesses’ average monthly repayments on the loan by almost half. Businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months. Given the continued challenges businesses are facing, the Government has opted to make the full repayment holiday available to borrowers from the first repayment meaning a borrower would be able to make no repayments for 18 months from taking out their loan. If borrowers want to take advantage of this option, they should notify their lender when they are contacted about their repayments.

Furthermore, the Government has amended the CBILS rules to allow lenders to extend loan terms from six to a maximum of ten years at lenders’ discretion and where they judge that this will help borrowers repay their loan, helping them to reduce their monthly repayments.

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