Pay As You Grow

The Government has announced Pay As You Grow options for Bounce Back Loan borrowers to help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.

Pay As You Grow options will be available to you once you start to repay your Bounce Back Loan, from 12 months after it was first approved.

Using these options won’t affect your credit score, or negatively affect your credit file. We may use requests for Pay As You Grow options to help us assess affordability in future lending applications, for example we will take into consideration incomings and outgoings, including existing debt repayments such as the Bounce Back Loan, and also your total debt exposure, which will include the outstanding Bounce Back Loan.

The options available to you when you are due to make your first payment after 12 months are as follows:

1. If you expect to be in a better position to repay in the future:

a). You could reduce your monthly repayments for six months by paying interest only.

• This option is available up to three times during the term of your Bounce Back Loan

or

b). You could take a payment holiday for six months.

• This option is available once during the term of your Bounce Back Loan

2. If you’re only able to repay a smaller amount:

You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5%.

If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.

Please note: depending on the option(s) you choose, the total amount you owe will go up. This is because your interest costs increase as interest accrues during the payment holiday and a larger amount of your loan is outstanding for longer/you’re repaying your loan over a longer period, depending on which option you take.

You can use options 1 and 2 together if you need to.

When you applied for your Bounce Back Loan, you declared that you understood that:

• You are fully liable for all repayments, and if you are unable to meet these obligations, this could negatively affect your credit score
• The 100% government guarantee is provided to cover any losses the lender makes and does not cover any losses that you might suffer if you are unable to meet your payment obligations
• We would not carry out any affordability checks on your application