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Can’t repay your Bounce Back Loan?

Find out what options are available to you if you can’t afford to pay back your Bounce Back Loan.

May 2021 marks the first anniversary since the Government launched its Bounce Back Loan Scheme to help businesses affected by the coronavirus pandemic.

If your business has taken out a Bounce Back Loan, you’ll be expected to make monthly repayments after the first anniversary of your loan, a month in arrears.

However, if you’re likely to struggle to start repaying your loan and need more flexibility, the Government has put in place some additional measures to help ease your financial difficulties, under a so-called ‘Pay As You Grow’ scheme.

What is Pay As You Grow?

The Pay As You Grow measures are for borrowers who have accessed the Bounce Back Loan Scheme.

They give you the option to:

  • extend the length of your Bounce Back Loan from six years to 10 years
  • make interest-only payments for six months, with the option to do this up to three times throughout the loan
  • request a six-month repayment holiday

You can use a single option or several in combination.

You can also repay your loan in full early, without facing early repayment charges for doing so.

As an example, you could, if your business is still struggling, opt to:

  • extend the length of the loan from six years to 10 years, and
  • make interest-only payments for 18 consecutive months

While this would lower your monthly payments, it would mean you’re paying back your loan over a longer period.

Also, over the course of 18 months, you would only have repaid the interest and none of the initial amount you borrowed (known as the principal).

Learn more

Alternatives to business loans

While loans are useful in many instances, it may be that your business would benefit from exploring other sources of funding.

If you have a ledger of unpaid invoices, for instance, you might be better looking into invoice discounting or invoice factoring, which will give you access to a percentage of the money you're awaiting.

This can help ease cashflow concerns.

Alternatively, you could explore investment by a business angel or via equity crowdfunding.

Guidance and support

You can contact your business representative organisation, who may be able to offer guidance or lobby on your behalf.

The Government has a Business Support section on its website

For advice on how to make your business more resilient, read our pages on dealing with debt and managing cashflow.

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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Advice NI – Business Debt Service

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