Coronavirus Bounce Back Loans (BBLS) update

04 - 06 - 2021

Bounce Back Loans (BBL) were intended to provide financial support to businesses during the coronavirus pandemic who were:
  • Were losing revenue, and seeing cash flow disrupted, as a result of the Covid-19 outbreak
  • Could benefit from £50,000 or less in finance.

The scheme opened in May 2020 and closed on 31 March 2021.

BBLS was available through accredited lenders of the British Bank. 


The original loans were for a period of 6 years. The loans ranged from £2,000 to a maximum of £50,000. The amount lent was calculated as a maximum of 25% of a business’ turnover.


Lenders were not permitted to charge any fees and the government set the interest rate for the loan at 2.5% per annum.


Businesses were not required to make any repayments for the first 12 months. However after 12 months repayments and interest become payable.


The BBL should only be used to provide an economic benefit to the business and not for personal purposes.


The scheme gave the lender a 100% government backed guarantee against the outstanding loan balance. The guarantee included both capital and interest. However the borrower remains fully liable for the debt.


Can I repay the loan early?


Yes. Early repayment is permitted at any stage without early repayment fees.


Can I extend the six year term?


Yes. The BBL term loan can be extended from 6 years to 10 years, at the same interest rate, but not anything in between.


What are my options if I cannot make the repayments?

If the business is struggling to make the repayments there are 3 options referred to as “Pay as You Grow” options:

1.      Extend the length of the loan from 6 to 10 years;


2.      Make interest only payments for 6 months. This option can be used up to 3 times throughout the term of the loan;

3.      Request a 6 month repayment holiday once during the term of the loan.


The options are standardised and available individually or in combination together.


Are the Pay as You Grow Options automatic?


No. The business is entitled to exercise the options but must discuss with the lender when they are going to activate one of the options.


Lenders will communicate with the borrower as to the Pay as You Grow Options 3 months before the BBL repayments are due to start. Lenders will inform their customers directly and borrowers should wait until they are contacted by their lender before enquiring about the options.


Further Information


Further information is available at:


If you would like to discuss any of the issues noted above please contact us 







Foremans LLP Umberlla
Foremans LLP