Bounce back loan extended: How to apply for the business ‘pay as you grow’ scheme after Government announces extension

Struggling businesses will be given more time to pay back their Bounce Back Loans under his new 'Pay As You Grow' scheme

Chancellor of the Exchequer Rishi Sunak during a virtual news conference in Downing Street, London, after he presented his Winter Economy Plan to MPs in the House of Commons. PA Photo. Picture date: Thursday September 24, 2020. See PA story HEALTH Coronavirus. Photo credit should read: John Sibley/PA Wire

Who is eligible?

You can apply for a loan if your business:

Businesses from any sector can apply, except banks, insurers and reinsurers (but not insurance brokers), and public-sector bodies as well as primary and secondary schools.

What is the ‘Pay As You Grow’ scheme?

Rich Sunak said that businesses would be given more time to repay Bounce Back loans under his new “Pay As You Grow” scheme.

The announcement means that new and existing borrowers will now have until the end of November 2020 to apply, instead of the original 4 November deadline.

Companies will now also be allowed to pay the loan back over 10 years instead of six, nearly halving the average monthly repayment.

The Chancellor said: ”Businesses who are struggling can now choose to make interest-only payments and anyone in real trouble can apply to suspend repayments all together for up to six months.

“No business taking up pay as you grow will see their credit rating affected as a result.”

File photo dated 12/10/16 of the logo of Lloyds Banking Group at their head offices in London. Around 30,000 small company owners were forced to open fee-paying business accounts with Lloyds Bank in order to access the Government's Covid-19 support, the competition watchdog has said. PA Photo. Issue date: Tuesday September 8, 2020. The Competition and Markets Authority said that small business customers, mostly sole traders, who had been running their companies' finances out of a personal account, were forced to open a business current account to get a Bounce <a href=Back Loan from the bank. See PA story CITY Lloyds. Photo credit should read: Nick Ansell/PA Wire" width="2500" height="1392" />

How can I apply?

The Bounce Back Loan Scheme is available to businesses through a number of accredited lenders and partners across the UK.

Those who want to apply for a bounce back loan will need to contact a bank directly and fill in a short online application.

When applying you’ll need details including your company number, your annual turnover as well as your tax return.

In some cases you’ll need to be an existing customer to be eligible – although banks including HSBC, Barclays and Starling will allow new customers to apply as well.

Sadly, small lenders including Tide, which was initially offering bounce back loans, closed its waiting list in July.

Lenders have the authority to decide whether to offer you finance – but if one bank turns you down, you can still approach other lenders within the scheme.

What if I am already claiming funding?

If you are already claiming funding for your business under the Coronavirus Business Interruption Loan Scheme (CBILS), you cannot apply for a Bounce Back Loan.

If you have already received a loan of up to £50,000 under CBILS and would instead like to transfer it into the Bounce Back Loan scheme, you can arrange to do this with your lender until end of November.