To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make an estimate of the cost of converting (a) Coronavirus Business Interruption Loan Scheme and (b) Bounce Back Loan Scheme repayments into a student loan style repayment scheme.
22 November 2021
The Government recognises that a diverse range of businesses took out loans under the Bounce Back Loan Scheme (BBLS) and some of those will benefit from more flexibility in making their repayments. That is why the Government introduced the “Pay as You Grow” (PAYG) measures, which allow borrowers to tailor their repayments to their individual circumstances. PAYG provides borrowers with the option to:
- Extend the length of their loan from six years 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
Borrowers can use these options either individually or in combination with each other. If borrowers want to take advantage of these options, they should notify their lender when they are contacted about their repayments.
For those who borrowed under the Coronavirus Business Interruption Loan Scheme (CBILS), the Government has taken action to allow lenders to extend the term of CBILS loans up to a maximum of ten years where they assess that borrowers are in difficulty and will benefit from the extension. Given loans under CBILS are more varied than the standardised BBLS and resemble more traditional commercial lending, CBILS borrowers are likely to benefit from engagement with their lender if they have concerns about repayments. Lenders have an ongoing relationship with CBILS borrowers and will be best placed to provide support tailored to the circumstances of each individual business.