Pay as You Grow was first announced in September of last year, but today’s announcement from the Chancellor should eases the burden on businesses.
Pay as You Grow originally offered options to:
- extend the length of the loan from six to ten years (reducing monthly repayments by almost half),
- make interest-only payments for six months
- pause repayments for up to six months after six repayments made
Today’s announcement extends the flexibility of option three which will now be available to all businesses from their first repayment, rather than after six repayments have been made.
This will mean that businesses can choose to make no payments on their loans until 18 months after they originally took them out.
Wayne Thomas, partner at Bates Weston welcomes the news.
“Businesses were expecting to face extreme cashflow pressures in March, as the first Bounce Back Loan payments became due for those who took them up in March 2020. The extended Pay as You Grow scheme, should provide much needed breathing space.”
The government advises that lenders should be contacting businesses to provide information on repayment schedules and how to access flexible repayment options. If you have a Bounce Back Loan, expect your lender to be in touch three months before your first repayment is due.
If you need our help in managing your cash flow position, please do get in touch.