The Bounce Back Loan Scheme (BBLS) has been extended to 31st January 2021 which is welcome news.
The scheme has to date provided more than a million loans to small businesses impacted by the pandemic.
New terms of the scheme provide for even greater flexibility and these changes are summarised below;
- Repayment can be over 10 years instead of 6 years
- 3 options during the term of the loan are provided to make interest only payments for up to 6 months at a time
- Business can suspend payments for up to 6 months – this option can only be used once
The BBLS has proved to be very popular and given it is self-certified, funds are received quickly by businesses.
An interest free loan for 12 months can be used to repay existing finance which is likely to be more costly. There is also no down-side in having a bounce bounce loan as interest free buffer for 12 months. If it is not used it can be repaid in full.
The scheme is suspected to result in a lot of fraud, which is a concern for the government.
Further details on the scheme can be found here.