With the pandemic far from over, and small businesses struggling more than ever, Chancellor Rishi Sunak has introduced some new options to the millions of businesses that have taken out Bounce Back Loans. Sunak outlines an extension of their loans from six to ten years (reducing monthly repayments by almost half) and making interest-only payments for 6 months. Businesses can also opt to delay all repayments for a further 6 months, allowing them to choose to make no payments on their loans until 18 months after they originally took them out. The new ‘pay-as-you-grow’ scheme is offering businesses that have acquired these loans (totalling £45 billion), more feasible and realistic repayment options. Showing more consideration for businesses that are unlikely to pay back their loans in the timeframe the government has given.
Our CEO, Katrin Herrling, explains the new allowances Sunak has introduced will positively benefit 1 in 5 businesses, by not only extensions in timeframe, but also tailored repayments specific to the individual needs of the business. Small businesses have shown strength and resilience in the face of Covid-19, however, even with government assistance and the funding options available – there is still a great deal of doubt in owners being able to repay. Not to mention the stress they must be under with debts growing and not much income outside of government help, of which our CEO Katrin Herrling touches on. Katrin continues to state an astonishing 46% of borrowers will struggle to repay their loans at all. Amidst this, the pay-as-you-grow scheme offers a little breathing room for borrowers which in turn will encourage businesses owners affected by the virus that not all is lost.
The full article can be found at here.