Bounce Back Loan Scheme (BBLS)

The Bounce Back Loan Scheme (BBLS) was created by the government to provide extra financial support for small businesses during the Covid-19 outbreak.

BBLS closed for new applications and top-ups on 31 March 2021.

What did the BBLS include?

The BBLS was created in 2020, during the first wave of the Covid-19 pandemic, to help struggling businesses stay afloat. If a business in the UK was losing income and seeing their trading disrupted because of Covid, they could apply for a BBL from a range of government-approved partners and lenders.

• These loans could range from £2,000 up to 25% of a business’s turnover up to a maximum of £50,000 for six years.
• No repayments for BBLs were required for the first 12 months
• Interest rates of BBLs was fixed at 2.5%
• BBLs did not have early repayment charges

Top-ups to the BBLS

In light of further waves of the Covid-19 outbreak, the government allowed businesses to ‘top-up’ their BBLs.

This meant that if a business hadn’t already taken out the maximum amount available to them when first applying for the scheme (25% of turnover up to a maximum of £50,000) they could apply to borrow the remaining amount.

• Interest rates remained the same (2.5%) on top-ups to the BBL.
• The expiry date of the top-up was the same as the original BBL.
• The minimum top-up was £1,000 – this was added to the original BBL.
• No interest on the top-up began accruing until the interest-free period on the original BBL expired (12 months after first BBL was taken out)
• No repayments were required until 12 months after the original BBL was taken out.

Pay as you grow (PAYG)

Pay as you grow (PAYG) has been created as a way to help businesses repay their BBLs. There are three different PAYG options, all of which give businesses a little more flexibility with their repayments.

If your business is still struggling with the impact, we recommend you consider at least one of these three options.

PAYG Option 1 – extend your BBL loan term

The first PAYG option allows you to extend your BBL term from six years to ten. As well as giving you more time to repay your loan, this also comes with the benefit of keeping the same interest rate of 2.5% throughout the extension of the loan.

PAYG Option 2 – take a payment holiday

If you’re struggling to make repayments and have other costs you need to take care of, then option two may help you more. This allows you to take a six-month payment holiday from your BBL.

This will give you time to put the extra income towards any other costs you might have, then return to paying your BBL back as normal once the payment holiday is over.

You can only use this option once during your BBL repayment term.

PAYG Option 3 – reduce your monthly repayments

Option 3 allows you to reduce your monthly repayments on your BBL for a period of six months. If you choose this option, you’ll pay interest-only on your loan until the six months is over, giving you a little more free cash if you need it.