SMEs reminded of their options with paying Bounce Back Loans

With many SMEs relying heavily on government help during the pandemic, the first Bounce back Loan repayments are due to start in June a year after its launch.

According to a Lloyds Banking Group survey, almost one in three (29%) SMEs who took out a loan are not aware of the Pay As You Grow (PAYG) options which provide more time and flexibility to make repayments.

Through the government’s PAYG scheme, borrowers can:

• request an extension of their loan term to 10 years from the standard six years, and
• reduce their monthly repayments for six months by paying interest only, or take a full repayment holiday for up to six months.

All lenders are writing to their customers at least three times before repayments are due to start to remind them and explain the options available.

Gareth Oakley, Managing Director of Business Banking at Lloyds Banking Group, said, “We know small business owners are incredibly busy and many simply won’t have had time to think about their loan repayments yet. The good news is that all Bounce Back Loan customers will receive at least three letters or emails from their lender before repayments are due to start, explaining how the Pay As You Grow scheme works.

“We’d encourage businesses to look carefully at the support available and what using Pay As You Grow would mean for future repayments. For most customers, it’s quick and easy to select an option via their lender’s website, which if needed can provide vital breathing space to get their business back on its feet as lockdown restrictions are gradually eased.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.