Businesses to be given more time to repay government loans
Businesses are to be given more time in order to repay their government support loans, according to Chancellor Rishi Sunak.
Payment plans for government loans under the Bounce Back Loans Scheme (BBLS) have been extended from six to 10 years, which means where a company has borrowed £50,000, the monthly repayments will drop from £940 to £460.
In addition, firms will be offered three six-month periods when they pay only the interest on the loan, equating to a £100 reduction month-on-month, for those who borrowed the maximum.
In September 2020, the Treasury launched the BBLS to help businesses affected by coronavirus.
An estimated 1.4 million firms have borrowed £45bn from the Treasury.
Sunak said: “Businesses are continuing to feel the impact of extended disruption from COVID-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.
“That’s why we’re giving bounce back loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.”
The business secretary, Kwasi Kwarteng, added: “While our vaccine rollout is moving at an incredible pace and the end is in sight, we know times are still tough for many companies and extra support is needed.
“These flexible repayment options will give businesses the time they need to recover from the pandemic before paying back loans, giving them the breathing space and confidence to build back better.”