Bounce Back Loan Scheme Extension and Changes

The Bounce Back Loan Scheme (BBLS) has provided support to many UK-based small businesses with up to 1.26 million loans having been issued to date. The BBLS application period was initially intended to close by 4 November and the initial proposed maximum loan facility term was six years.

Along with the CBILS, the government has announced the time period for new BBLS applications has been extended to 31 January 2021.

The government has also announced increased flexibility for the repayment of BBLS – under the Pay As You Grow scheme businesses will have options to:

• Repay their loan over a period of up to ten years
• Move temporarily to interest-only payments for periods of up to six months (an option which can be used up to three times)
• Pause repayments entirely for up to six months (an option which be used only once and only after having made six payments).

As for CBILS there has been no change to the other key elements of the BBLS – details are available here from our earlier article – including:.

• Government payment of lenders arrangement fees and first 12 months of interest
• Government guarantee of 100% of the loan
• Loans are between £2,000 and £50,000, capped at 25% of turnover
• No security is required
• No repayments are required to be made for the first 12 months of the loan
• Loan repayments can be made early without penalty
• Interest rate after the first 12 months cannot exceed 2.5% per annum