Bounce Back Loan Scheme
Greater flexibility with repayments – Pay as You Grow
Businesses that took out government-backed Bounce Back Loans to get through Covid-19 have greater flexibility to repay their loans.
We will continue to inform customers about PAYG directly and will advise you about how your repayment options may change according to your choices under the scheme. You remain responsible for repaying your Bounce Back Loan and are fully liable for the debt.
Pay As You Grow (PAYG) enables businesses who are repaying their Bounce Back Loans to:
Request an extension of your loan term to 10 years from six years, at the same fixed interest rate of 2.5%.
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.
Take a repayment holiday for up to six months. This option is available once during the term of your Bounce Back Loan.
You can use these options at any point during the term of the loan, individually or in combination with each other. You should be aware that you will pay more interest overall if you use one or more of these options, and that the length of the loan will increase in line with any repayment holidays taken.
If you want your Pay as you Grow option to take effect from your next repayment date, make sure you choose your option more than 5 working days before your next Direct Debit is due.
Will using Pay as You Grow affect my ability to obtain finance in the future?
Using Pay as You Grow will not, in principle, affect your ability to obtain finance in the future. Pay As You Grow is designed to alleviate financial difficulty, even before it arises, by giving you flexibility in meeting repayment obligations. Using Pay as You Grow will not affect your credit rating, but it may affect our future creditworthiness assessments.
For example, when considering a request for additional funding we will take into consideration incomings and outgoings, including existing debt repayments such as the Bounce Back Loan Scheme facility. It will also consider a business’s total debt exposure, which will again include the outstanding Bounce Back Loan Scheme facility.
What repayments may look like
This guide shows you what your repayments may look like:
- Reduce your monthly repayments for six months by paying interest only.
- Take a payment holiday for six months.
- Request a term extension of your loan term from six years to 10 years at the same interest rate of 2.5%.
Important Information including Key Facts
We are expected to do the following in respect of your BBLS Loan (Loan):
Monitor repayments you make during the life of the Loan and take appropriate action to help you where there are signs of actual or possible repayment difficulties.
Make appropriate adjustments if we identify you as vulnerable or we have reason to believe you may be vulnerable in order to ensure your circumstances are accommodated throughout the duration of the Loan.
If you default under the BBLS Loan, give you a reasonable period to remedy any breach and will not treat the same as an event of default if it is remedied by you within this period.
Not require you to pay any fees of any description (including on default) or any default interest except we may continue to charge interest at 2.5% per annum if the Loan is not repaid when due until such time as it is repaid.
Pay due regard to your information needs and provide information in a way which is clear, fair and not misleading.
We are to provide you with the following information in relation to your Loan during its term:
Timely, clear and adequate information that enables you to understand that, where you fail to make payments under your Loan with us, the amount missed, what can be done to remedy, in what timescales, and the impact (if any) on future repayments;
Information about any proposed action we may take in respect of the Loan (upon any default by you), prior to taking such action;
Regular information about the Loan (on at least an annual basis) in the form of a statement setting out details of the payment transactions in respect of your Loan during the period since such information was provided (or the date the Loan was advanced to you, if no such information has been provided previously) and amounts outstanding under your Loan; and
Information on options available to you for help and assistance, including sources of free independent advice.
Please note the above is for information purposes only and will not be deemed incorporated into the Loan (nor provide you with any additional rights under it).
BBLS Loans are not subject to the usual consumer protections that apply to business lending and as such you will not have the benefit of the protection and remedies that would otherwise be available to you under the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974.
We’re here to help
Our dedicated Relationship Teams are experienced, in supporting you and your business. They will take the time to get to know you and the challenges your business might be facing. Once the source of any financial problems are understood, they will support you in finding potential solutions.
You can visit the SME Toolkit to find a range of tools, resources and guidance to help your business navigate uncertainty.
To find out more about how we can support you and your business, please visit Business Support.
For information on dealing with business challenges please visit our Dealing with financial difficulties page.
If personal finances are a struggle, our personal support page may be able to help.
Other business support:
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.
If you don’t believe any of the PAYG options or above support can help you (including if your business has permanently ceased trading), or you have any questions about PAYG speak to us. Please contact either your Santander UK relationship team or Commercial Direct on 0800 077 8850.
If you have, or about to enter insolvency, please call us on 0800 077 8850. Lines are open Monday to Friday, 9.30am to 1.00 pm and 2.00 pm to 4.00 pm.