Changes to the Bounce Back Loan scheme
Wednesday, 10 February 2021
The Chancellor has announced further alterations to the Coronavirus Bounce Back Loan scheme.
The timescales and eligibility criteria remain unchanged. Small and medium sized businesses, who are yet to take out a Bounce Back Loan, have until 31 March 2021 to apply. The eligibility of the loan remains the same; the company, partnership or sole trader must be:
- Based in the UK
- Established prior to 1 March 2020
- Adversely affected by the coronavirus pandemic
As a reminder, the key terms of the Bounce Back Loan remain unchanged and are as below:
- Businesses can borrow between £2,000 and up to 25% of their turnover, up to a maximum loan of £50,000.
- Government guarantees 100% of the loan.
- 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 length of the loan is six years, but you can repay early without incurring a fee.
- Applications for the Bounce Back Loan scheme should be made to your bank in the first instance.
Changes to Bounce Back Loans
The changes to the Bounce Back Loan scheme mean that the business will be able to take advantage of ‘pay as you grow’ options which will allow more flexibility in the repayment terms of the loans. The options available are:
- Extending the length of the loan from the initial six years to ten
- Making interest-only payments for six months, with the option to use this up to three times throughout the course of the loan
- Pausing repayments entirely for up to six months
If you have any questions on the Bounce Back Loan Scheme, please get in touch with your usual MHA Larking Gowen contact. You can find contact details on the Our People section of the MHA Larking Gowen website. Alternatively, call 0330 024 0888 or email firstname.lastname@example.org.