Bounce Back Loan Scheme

Posted Monday 4th May 2020

Updated Thursday 10th June 2021

Both the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS) were withdrawn by the government in April 2021. These loan schemes had been designed for small and medium businesses impacted by the COVID 19 pandemic.

The very first BBLS repayments became due in May 2021. Businesses have a variety of repayment options available to them to suit their individual needs and circumstances, notably under the flexible Pay as You Grow system. Most notably, businesses may choose to:

• Delay repayments for up to six months (meaning there will be no payments until 18 months after the loan was taken out);
• Extend the loan length from six to ten years; and/or
• Make interest-only payments for six months.

Taking advantage of any of the above options, or a combination thereof, may however lead to higher interest, especially in light of the fact that the government will only cover the first year’s costs of interest. They may also undoubtedly increase the length of the loan to reflect the duration of any repayment holidays. The various options and their benefits to the individual business must therefore be considered carefully.

While the BBLS and CBILS schemes are no longer open for new applications, your business may still be able to take out a loan under the government’s new Recovery Loan Scheme (RLS). The RLS is also accessible to businesses that have previously taken out a CBILS or BBLS facility, albeit the loan amount available may in some cases be limited by these existing schemes.

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This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.

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