Pay As You Grow

Using these options could give you more time and flexibility to pay back your Bounce Back Loan Scheme (BBLS) loan.

On Saturday 6 February 2021, the Chancellor of the Exchequer announced further details about Pay As You Grow, which helps UK smaller businesses that have taken out a Covid-19 emergency Bounce Back Loan to manage their cashflow and have a better chance of getting back to growth.

Find out more about Pay As You Grow below.

What is Pay As You Grow? +

Originally announced by the Chancellor of the Exchequer in September 2020, Pay As You Grow will enable businesses who have started repaying their Bounce Back Loans to:

  • request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
  • reduce their monthly repayments for six months by paying interest only – this option is available up to three times during the term of their Bounce Back Loan
  • take a repayment holiday for up to six months – this option is available once during the term of their Bounce Back Loan

As a borrower, you can use these options individually or in combination with each other. You remain responsible for repaying your Bounce Back Loan and fully liable for the debt.

Be aware that you'll 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 you take.

How do I access Pay As You Grow? +

Lenders will:

  • start to communicate Pay As You Grow (PAYG) options to Bounce Back Loan Scheme (BBLS) borrowers three months before repayments commence
  • inform their customers about PAYG directly, so borrowers should wait until they are contacted by their lender before enquiring about the scheme
  • advise customers about how their payment profiles may change according to their choices under the scheme

Businesses first began to receive BBLS loans in May 2020 and the first repayments will become due from May 2021 onwards.

Other business finance support options +

In the first instance, if you have concerns regarding repaying your debt, please contact your lender.

In addition, the British Business Bank has a range of guidance and resources available to all businesses, including content on dealing with debt, managing your cashflow, and a list of independent advice services.

Regional support

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