Are you looking for bounce back loan interest rate then this article is for you with all the information that you need about bounce back loan.
To help companies get financial assistance during the Covid-19 pandemic, the government created the Bounce Back Loan Scheme. Although it is now closed, you can still find more information through Pay As You Grow (PAYG) about how to repay these loans.
Chancellor Rishi Sonak created a new loan scheme called the Bounce Back Loan Scheme to support small businesses during the coronavirus pandemic.
The scheme was closed for applications on 31/03/2021. There are other financing options available if you need funding for your business.
If borrowers are having difficulty repaying their loans, businesses who have taken out a Bounce Back Loan may be able to adjust the repayments. Borrowers have the option to either extend their loans or make interest-only payments. Or, they can pause repayments for as long as six months.
This guide will explain what the Bounce Back Loan Scheme is and how you can customize repayments using the various Pay As You Go options. We will also discuss other types of financing that might be appropriate for your business needs.
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Bounce Back Loan Interest Rate
Bounce Back Loan Interest Rate is set at 2.5% a year
The Bounce Back Loan Scheme was an initiative of the government to assist small businesses during the coronavirus pandemic. The maximum loan amount for businesses was PS50,000. Businesses could apply to borrow up to 25% of their annual turnover.
The terms of loans were up to 6 year, but it was possible to extend them to 10 years through the Pay as You Grow program.
The government guarantees all Bounce Back loans and they were open for applications from May 2020. It was closed to applications on 31 March 2021.
Repayments for Bounce Back loans
After receiving the loan, businesses are required to repay their Bounce Back Loans within 12 months. The loan will be subject to a fixed interest rate at 2.5% per annum.
A Bounce Back Loan can be repaid in monthly installments for the agreed term just like any other loan.
The Bounce Back Loan Scheme allows businesses to have more flexibility in their repayments via Pay As You Grow (PAYG). If a business is having trouble paying back the Bounce Back Loan, this can allow them to have some breathing room.
There are two repayment options for Pay as you Grow:
- You can extend the loan for six to ten years at the same interest rate. You would be able to reduce your monthly payments, but pay more interest overall.
- You can make interest-only payments for six month, or you can do it three times during the life of the loan. While this will lower your monthly payments, you will still have to pay more interest over the life of the loan.
- You can take a six-month payment vacation starting at the due date of the first payment. You can only use this once, and you’ll pay more interest total.
These options can be used individually by businesses or combined.