Deadline for applying for COVID-19 finance extended
The Government launched four temporary Government-backed schemes to provide finance to businesses struggling as a result of the COVID-19 pandemic:
- the Bounce Back Loan Scheme (BBLS);
- the Coronavirus Business Interruption Loan Scheme (CBILS);
- the Coronavirus Large Business Interruption Loan Scheme (CLBILS); and
- the Futures Fund.
The deadline for applying with new applications under the COVID-19 finance schemes has been extended to 30 November 2020.
Pay as you Grow
If you took out a Bounce Back Loan, you can take advantage of Pay as you Grow to spread your loan repayments over ten years rather than six.
Under Pay as your Grow, you will also have the option to move temporarily to interest-only payments for up to six months. You can make use of this option up to three times during the life of the loan. Once you have made six payments, you will also have the option to pause repayments entirely for six months. This option can only be exercised once.
You do not need to make any repayments of a Bounce Back loan for the first 12 months. The Government covers the interest on the loan in the first year. Thereafter, interest is payable at the rate of 2.5% per annum.
Coronavirus Business Interruption Loans
The Chancellor announced in his Winter Economy Plan that the Government intend to allow CBILS lenders to extend the term of a loan provided by the scheme to allow for a repayment period of up to ten years, rather than the current maximum term of six years. This will provide additional flexibility for UK-based SMEs who may otherwise be unable to repay their loans.
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