Your Bounce Back Loan Options
The video below was released by the British Business Bank and applies to all bounce back loans regardless of which lender you borrowed from.
As repayments start to fall due, you now have a few options should you need to buy a little more time or want to shield your cash flow a little longer.
Ultimately, a bounce back loan is still a loan and will need to be repaid, plus if you extend the period you will pay back more interest, but there is some flexibility.
These options are being called ‘Pay as You Grow‘. In simple terms you have three options:
Extend The Loan Term
You can request an extension of your bounce back loan term up to a total 10 year period at the same fixed interest rate of 2.5%
You can reduce your monthly repayments for six months by paying interest only. You can do this up to three times during the term of your bounce back loan. This one may be worth bearing in mind as you do only get three periods of interest only throughout the whole period, it may be one not to use all in one go
You can take a repayment holiday for up to six months. This option is available once during the term of your bounce back loan. Remember that whilst this will help with cash flow you will still be incurring interest during this period.
This video gives an overview of your options:
Please remember that you will always need to repay the bounce back loan at some point, even though their is a Government guarantee to the lender you will still be asked to repay and the lender will need to show they have taken all opportunities to recover the money before claiming on the guarantee.
As a wise man once said, use your options wisely. If you are worried about repayment then get on the front foot and talk to the lender or take some good professional advice. If you want help or contacts for this then let me know.
By Dave Farmer