The government’s Bounce Back Loan scheme has thrown an essential lifeline to thousands of businesses during the pandemic. Repayments began in April this year, but as many businesses are still struggling under the lasting economic conditions caused by lockdown and other restrictions, what options do these companies have?

The Pay As You Grow (PAYG) amendments to the loan scheme provide borrowers with three options to offset any potential disruption to their cash flow. Further information about these options can be obtained from individual lenders – some banks have contacted their customers already with information about how to apply.

These options provide both short and long-term relief to any businesses struggling with their repayments.

Option 1 – Extend your loan from six years to ten years (at the same fixed interest rate of 2.5%)

Option 2 – Reduce your payments to interest-only for a six-month period. This option can be taken up to three times over the lifetime of the loan.

Option 3 – Take a six-month payment holiday. This option is available once during the lifetime of the loan.

These options can be taken separately, or in combination, to provide you with the maximum support possible. A combination of all three options could see your payments stop immediately for six months, followed by a six month period of paying interest only, followed by a permanently reduced payment rate (albeit for an additional four years).

Managing company finances in these tumultuous times is challenging for everyone, with so much uncertainty and rapid change affecting all industries. Even with these options, it’s difficult to ensure enough flexibility in your financial planning to guard against all possible difficulties.

Working with a profit consultant, such as S4B, will ensure that your organisation is taking the right measures to safeguard against any future disruption. With a full commercial review of your business, we can highlight areas where profits can be maximised, and your cash flow can be improved. Get in touch to see how we can help you and your business.