Originally written by Timothy Adler on Small Business
UPDATED: The chancellor is extending the repayment period on Bounce Back Loans for 1.4m small businesses.
Small firms will have ten years to repay instead of the previous six years, as announced by Sunak in September 2020. Interest on extended loans will be at a fixed rate of 2.5 per cent.
Businesses can also choose to make interest-only payments for six months (this option is available up to three times on the length of the loan) or pause repayments for up to six months (this option is only available once).
Lenders will start communicating these options to customers three months before repayments begin and advise them on how each option may affect their payment profile. They contact customers directly so there’s no need to get in touch with them.
The Bank of England’s regulation chief is warning that half of Bounce Back Loans will go sour.
What’s more, figures from the Office of National Statistics show that 14 per cent of businesses think they have little or no chance of surviving the next three months.
Last year, the government extended the application for Bounce Back Loans until the end of March 2021. Previously, the loan deadline was extended to January