SMEs are to be aided in paying back loans that have been state-backed in a bid to ease the pressures on business owners that are still operating under current restrictions.
With many firms facing the prospect of having to start repaying bounce-back loans now that the first-year interest free period is coming to an end. Rishi Sunak has given a number of options to business including:
- Extending the length of the loan from six years to ten
- Making interest-only payments for six months, with the option to use this up to three times throughout the loan
- Pausing repayments entirely for up to six months
This will allow companies to ‘pay-as-you grow’ and the Chancellor 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 National Audit Office said that 60% of loans made under the scheme may never be paid back and with over £45billion having been borrowed by 1.4 million firms all efforts to aid economic recovery will be welcomed.
