Changes to Bounce Back Loans

About: The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

The scheme is open to applications until 31 January 2021.

The Guidance on Bounce Back Loans has been updated to allow people to top up existing loans, extend the loan period, make interest-only repayments, or pause repayments. Specifically if you already have a Bounce Back Loan but borrowed less than you were entitled to, from 10 November you can top up your existing loan to your maximum amount. You must request the top-up by 31 January 2021.

Also, before your first repayment is due, your lender will contact you about further options to:

• extend the term of your loan to 10 years
• move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
• pause your repayments for a period of 6 months if you have already made at least 6 repayments (you can use this option once).

See details here.