Repaying your Bounce Back Loan (BBL)

Repaying your Bounce Back Loan - The government has announced Pay As You Grow (PAYG) options for Bounce Back Loan borrowers to help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.  

The Pay As You Grow options are not available for you to select yet, so please don’t call us. We’ll be updating our website with further information on Pay As You Grow as soon as it becomes available.

When will my Bounce Back Loan repayments start?

You received a payment holiday for the first year of your loan, with the interest being paid for by the government through a Business Interruption Payment.  After the first 12 months, you’ll need to start making monthly repayments to repay the amount you borrowed, plus interest from the date your repayment holiday ends. 

We’ll automatically collect your repayments using the payment details set up when you opened your loan. If your payment details have since changed, please let us know.

You’ll pay less if you pay back early

If you no longer need the loan, you can choose to pay it back early. You’ll then pay less interest. There are no early repayment charges and you won’t pay any interest if you pay the full amount before the end of your initial 12-month repayment holiday.

Or you can make a one-off repayment of any amount towards the loan, as well as additional payments on a regular basis, and doing so will also help save you money on your interest payments.

Your Pay As You Grow repayment options

The Government has announced Pay As You Grow options for Bounce Back Loan borrowers to help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.

Pay As You Grow options will be available to you once you start to repay your Bounce Back Loan, from 12 months after it was first approved. 

Using these options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall. 

The Pay As You Grow options available to you when you are due to make your first payment after 12 months are as follows:

1. If you expect to be in a better position to repay in the future:

​​a. You could reduce your monthly repayments for 6 months by paying interest only.

​​​​Illustrative example:

  • On a loan of £50,000 this would reduce monthly payments from £936.49 to approximately £106.16 during the six-month period.
  • You’ll pay more interest overall, so the total amount repayable on a £50,000 loan would increase from £54,431.60 to £55,056.94, unless you repay early.
  • You’ll have the choice to extend your loan term for an additional six months if you take this option but regardless, your interest costs will increase. If you retain your original loan term a larger amount of your loan is outstanding for longer and if you wish to extend your loan term by 6 months, you're repaying your loan over a longer period.
  • This option is available up to three times during the term of your Bounce Back Loan.

Take a look at what repayments might look like for each of the Pay as you Grow repayment options. 

Or

b. You could take a payment holiday for 6 months

Illustrative example:

  • You’ll make no capital repayments or interest payments during this time.
  • The total amount you owe will go up. This is because your interest costs will increase as interest accrues during the payment holiday and so the total amount repayable on a £50,000 loan would increase from £54,431.60  to £55,100.49, unless you repay early. You’ll have the choice to extend your loan term for an additional six months if you take this option but regardless, the total amount you owe will go up. If you retain your original loan term a larger amount of your loan is outstanding for longer and if you wish to extend your loan term by 6 months, you're repaying your loan over a longer period.
  • This option is available once during the term of your Bounce Back Loan.

Take a look at what repayments might look like for each of the Pay as you Grow repayment options. 

2. If you’re only able to repay a smaller amount each month:

You could request an extension of your loan term from 6 years to 10 years at the same interest rate of 2.5%*.

Illustrative example:

  • Extending your loan term to 10 years would reduce your first repayment (at month 13) on a loan balance of £50,000 from £939.49 to £569.12 (these figures comprise capital plus interest).
  • You’ll accrue more interest, so the total amount repayable on a £50,000 loan (capital plus interest) would increase from £54,431.60  to £56,933,31, unless you repay early.

*If you’re considering this option, you should think carefully about your ability to repay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan. 

Take a look at what repayments might look like for each of the Pay as you Grow repayment options. 

You can use options 1 and 2 together if you need to. Both options 1a and 1b will be available throughout the course of your loan term.

Please note for all three options the amount of interest you will pay will increase as a result of selecting one or more of the Pay As You Grow options.

Important information

The examples for options 1a and 1b above assume that a customer will choose to extend their loan term for an additional 6 months. This would mean that their total loan term would be 6 years and 6 months. 

The illustrative examples are based on each PAYG option being taken individually, and assume the option is taken before the first repayment date is due. The figures in the examples above have been calculated and based on a £50,000 loan with an original drawdown date of 06/05/2020, so your repayment amount may be different due to the specific date you’ve taken out your loan. Please note that the illustrative examples are solely for information purposes only, offered as a guide to how your repayments could be impacted by taking one of the PAYG options.  They are not meant to be relied upon as giving you an accurate representation of what your own repayments will be.

We’re here to help

We’ll be in touch before your first repayment date to let you know more about Pay As You Grow and how to opt in. However, if you’re worried about your finances in the meantime, here are some support options for you to consider.

You can visit our Survive and Revive hub to find a range of support including:

  •  toolkits to help you market your business
  •  e-commerce packages to get you trading online 
  •  a series of business support webinars on a variety of topics to help guide you through these uncertain times 

Our Independent help and support page gives details of organisations that you could contact for free debt advice, either personally or for your business. 

Other business support:

The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.  

UK Finance have also created this leaflet to assist you with managing debt.

Contact us:

If you don’t believe any of the PAYG options or above support can help you (including if your business has permanently ceased trading), and you’d still like to speak to us, please contact either your Santander UK relationship team or Commercial Direct on 0800 077 8850.

Remember, you won’t be able to choose Pay As You Grow options if you call, as they’re not available yet. 

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