Repaying your Bounce Back Loan
You received a payment holiday for the first year of your loan, with the interest being paid for by the Government via a Business Interruption Payment. After the first 12 months, you will need to start making monthly repayments to repay the amount you borrowed, plus interest from the date your repayment holiday ends. We will send you a repayment schedule outlining your options, around three months before your first payment is due.
Please note you do not need to contact us in advance.
If you no longer need the loan, you can choose to pay it back early. You’ll then pay less interest. There are no early repayment charges and you won’t pay any interest if you pay the full amount before the end of your initial 12-month repayment holiday.
Or you can make a one-off repayment, as well as additional payments on a regular basis, and doing so will also help save you money on your interest payments.
The Government has announced other repayment options – 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 up to three months before your first repayment.
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.
A useful infographic and video can be viewed here which shows the Pay As You Grow options for the British Business Bank.
- Pay As You Grow Options
The options available to you when you are due to make your first payment after 12 months are as follows:
- If you expect to be in a better position to repay in the future:
a) 6 month Interest Only Option
You could reduce your monthly repayments for six months by paying interest only.
- The total amount you owe will go up. This is because your interest costs increase as you’re repaying your loan over a longer period.
- This option is available up to three times during the term of your Bounce Back loan. You can select this option back to back or on 3 separate occasions.
- You can choose to extend your loan term by the period of this extension (6 months), unless you have already extended your loan term to 10 years.
- If you select this option, you’ll need to wait until the end of the 6-month period before you can use any other option.
b) 6 month Full Repayment Holiday
You could take a payment holiday for six months.
- You’ll make no capital repayments or interest payments during this time.
- You can use a full repayment holiday once during the term of your loan.
- The total you owe will go up. This is because your interest costs increase as interest accrues during the payment holiday and you’re repaying your loan over a longer period.
- You can choose to extend your loan term by the period of this holiday (6 months), unless you have already extended your loan term to 10 years.
- If you select this option, you will need to wait until the end of the 6-month period before you can use any other option.
- If you’re only able to repay a smaller amount:
10 Year Term Extension
You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5%.
- The total you owe will go up. This is because you will be paying more interest over a longer term.
- You can choose to extend your loan term at any time during
- 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 for all three options that the total amount you owe will go up. This is because your interest costs increase as you’re repaying your loan over a longer period.
Your Options Combined
You can use the 6 month Interest only or 6 month Full Repayment Holiday Option and 10 Year Term Extension together if you need to.
- You can choose to extend your loan term to 10 years and take a 6 month interest only option or 6 month full repayment holiday.
Refer to individual options above to understand the impact of each option on the total cost of your loan.
- Pay As You Grow Loan Calculator
Use our calculator to understand the impact each Pay As You Grow option has on your monthly repayments, and on the overall cost of your loan.
- Please ensure you enter your current Bounce Back loan (including any Top-Up) amount correctly.
- Details of your loan amount can be found on your loan facility letter.
- How to apply
As detailed above the Government has announced Pay as you Grow options for Bounce Back 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. Using these options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall.
Therefore before beginning please ensure you have considered all PAYG options carefully and referred to the PAYG calculator
You will need to have:
- Bounce Back Loan reference number
- Business Current Account Number
- Business Current Account Sort Code
- Email address and Mobile number of original applicant
You can only request one ‘Pay As You Grow’ eligible option at a time.
You will not be able to cancel a ‘Pay As You Grow’ option if you change your mind, therefore please take time to refer to PAYG information and our calculator before making your selection. However, if you subsequently decide you no longer require the support provided by the PAYG options, you can still reduce the interest you will pay by making full or lump sum repayments.
If you want Pay As You Grow to start from your next repayment date, please apply as soon as possible. Requests received less than 20 days before the repayment is due may not be processed.
Note: if there are changes to your business or signing authority we may need more time to progress your application.
Please take time to consider the above information and calculator carefully before making your selection.
If you do want to proceed with a PAYG option but do not want to complete the PAYG online application form, please complete the PAYG Enquiry form and we will aim to contact you within 48 hours.
- We’re here to help
You do not need to contact us in advance. We will send you a repayment schedule outlining your options, around three months before your first payment is due.
However if you’re worried about your finances, please contact us at: BBNICovidemail@example.com
You can also contact the following organisations for free advice:
Small Business Commissioner (SBC)
The SBC is an independent public body the Government created to tackle late payment and unfavourable payment practices in the UK’s private sector.
Guidance and advice on dealing with debt, from the organisation that represents the UK’s banking and finance industry.
For a copy of the UK Finance leaflet on dealing with debt, please click here
Advice NI – Business Debt Service
Free tailored, independent and impartial advice on debt for sole traders, partnerships and limited companies in Northern Ireland.
StepChange –Debt Charity
Debt advice for self-employed people and sole traders.
FSB Debt Recovery
A debt recovery service for members of the Federation of Small Businesses (FSB). Find out what the service offers and what membership entails.
- Other business finance support options
In addition, the British Business Bank
has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.
Reminder of your Bounce Back Loan terms and conditions
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.
For the full set of declarations you made, please click here.
All lending facilities are subject to the Bank’s lending conditions. Terms and conditions apply. Bank of Ireland UK adheres to the Standards of Lending Practice which are monitored and enforced by the Lending Standards Board.
Bounce Back Loan Scheme is delivered by the British Business Bank, through Bank of Ireland UK as an accredited lender.
Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit british-business-bank.co.uk.