During the pandemic many businesses helped ease cash flow by taking advantage of a bounce back loan.
However what happens now repayments are due if your business has yet to recover from the impact of the pandemic?
Bounce back loan scheme initially gave businesses an interest and repayment free loan for 12 months.
12 months on cash flow may not be back to pre-pandemic times and therefore businesses are feeling the pinch, especially when they factor in monthly repayments of these loans.
The Chancellor has announced a new Pay as You Grow Scheme for repayment flexibility.
There are three options available to support businesses:
- Request an extension of you loan term from 6 to 10 years, at the same fixed interest rate of 2.5%.
- Reduce your monthly repayments for 6 months by paying interest only. This option is available up to 3 times during the term of the loan.
- Take a repayment holiday for up to 6 months. ,This option is only available once during the term of the loan.
You can use these options individually or in combination with each other. Using any of these options will increase the overall cost and length of your loan so it is important to make sure you consider this into future cashflows.
If your business is struggling, please contact our business services team who will be happy to assist you and your business with managing cashflows.
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