6th July, 2021, Chris Goad
Chris Goads BSc FCA, partner at Stephenson Smart’s Wisbech, March and Downham Market offices, assesses the impact that Bounce Back Loan repayments might have on businesses and what options there might be to help with making the repayments.
What is a Bounce Back Loan?
The Bounce Back Loan was one of the financial support schemes put in place by the government to support businesses, at the start of the coronavirus pandemic.
Many businesses are now starting to receive the payment schedules for Bounce Back Loans taken out, with their first repayments being due.
Although Covid restrictions are starting to be lifted, we are still seeing different sectors and businesses recovering at different rates. Some businesses are still not functioning at the same level they were before the pandemic hit, and therefore seeing a reduction in income.
Some of our clients are started to be contacted by the bank they took their Bounce Back Loan through with repayment schedules for those loans, often with a high monthly payment. For example, if a business took out a Bounce Back Loan of £50,000, they will be looking at a repayment rate of around £887 per month, to start imminently.
What if I can't start to repay my Bounce Back Loan?
Our advice is that if your business is facing a repayment figure that is unattainable you may be able to look at a Pay As You Grow option. This allows firms to extend their loan terms, reduce repayments or take a repayment holiday.
The bank you borrowed your Bounce Back Loan from should have been in touch to highlight this option. It is important to contact them as soon as possible, and ideally about a month before your first payment is due, to ask to defer or flexibly manage your repayments.
As Chartered Accountants and Business Advisors, Stephenson Smart are qualified and experienced in helping businesses manage their cashflow and plan financially, even in difficult times. We are keen to support our clients, local businesses and our communities during this recovery period.
If we can support you or your business with this or any other financial help, please get in touch.
Profile: Chris Goad BSc FCA
Related Pages: Covid-19 Business Interruption Guidance
