The Chancellor of the Exchequer has today extended the government’s three Coronavirus business interruption loan schemes and the Future Fund and set out new Pay as You Grow measures for borrowers.

Almost 2.1 million small to medium-sized UK businesses have taken loans via the Bounce Back Loan Scheme (BBLS), with £29,000 being the average loan size. Bounce Back Loans have given over small businesses a £38 billion boost to survive the coronavirus pandemic.

More than 60,000 small and medium-sized businesses have taken out loans distributed under the Coronavirus Business Interruption Loan Scheme (CBILS). Many businesses taking smaller BBLS have converted their loans into larger loans to increase the size of their capital buffer against the economic crisis.

More businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) and Future Fund.

As the schemes were announced at different times, they previously had different closing dates, with each scheme originally open for applications for a period of six months – 30 September (CBILS and Future Fund), 20 October (CLBILS), and 4 November (Bounce Back Loan Scheme). Today’s extension aligns all the end dates of the schemes to 30 November, ensuring that there is further support in place for those who may need it.

In addition, the Chancellor has today announced new Pay as You Grow measures for borrowers who have accessed the Bounce Back Loan Scheme. The measures will provide borrowers with the option to:

• Extend the length of the loan from six years to ten.
• Make interest-only payments for six months, with the option to use this up to three times throughout the loan
• Once six payments have been made, request a six-month repayment holiday

2/ This means:

✅Loans can be extended from six to ten years – nearly halving the average monthly repayment.

✅Businesses who are struggling can now choose to make interest-only payments.

✅Anyone in trouble can apply to suspend repayments altogether for up to six months.

— Rishi Sunak (@RishiSunak) September 24, 2020

Businesses will be able to use these options either individually or in combination with each other, as well as having the option to fully repay their loan early and will face no early repayment charges for doing so. These will be standardised options available to all borrowers.

The government is also seeking to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.

Lenders will send borrowers more detailed communications on these options in due course. No business taking up Pay As You Grow will see their credit rating affected as a result.

Further information on the existing business support schemes is available on the British Business Bank website.

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