What is the Bounce Back Loan Scheme?
Definition of Bounce Back Loan Scheme
The Bounce Back Loan Scheme was an initiative introduced by the government to help small and medium-sized businesses affected by the coronavirus crisis to secure loans of up to £50,000. The scheme closed on 31st March 2021.
Unlike the Coronavirus Business Interruption Loan Scheme (CBILS), in which only 80% of loans were guaranteed by the government, loans secured through the Bounce Back Loan Scheme came with a 100% guarantee from the government.
Pay as You Grow
In September 2020, the Chancellor announced that the Bounce Back Loan Scheme would offer business owners increased flexibility to repay Bounce Back Loans through a new government repayment system called ‘Pay as You Grow’. A further announcement about the ‘Pay as You Grow’ system was made in February 2021.
Using this system, businesses who took out a loan through the Bounce Back Loan Scheme were sometimes able to:
- extend the length of the loan from six years to ten
- make interest-only payments for six months, with the option to use this up to three times throughout the loan
- pause repayments entirely for up to six months
Business owners can find information about further financial support during the coronavirus pandemic on the government's website.