BUSINESES have been given more time to pay back loans taken out to help them through the coronavirus crisis.
Around 1.4million small companies and sole traders are expected to benefit from the change to the bounce back loan scheme.
Bounce back loans of up to £50,000 were made available at the start of the pandemic to help business owners like builders, shop-keepers and hairdressers stay afloat.
Flexible terms for paying back the loan were later announced during Chancellor Rishi Sunak's Winter Economy Plan and called Pay as You Grow.
It gave borrowers 10 years to repay the loan – an increase from the original six.
They were also given the option to make interest-only payments and for those worst affected, the ability to suspend repayments altogether.
Now, the chancellor has said businesses will get an extra six months before they have to start paying back the loan.
It increases the buffer before having to start repayments of both interest and the loan itself to 18 months.
Coronavirus help for the self-employed
HERE’S a round-up of the main coronavirus government schemes for the self-employed:
- Grants of up to £7,500 under the Self-Employment Income Support Scheme
- Deferral of Self Assessment Income Tax and VAT payments
- Grants for businesses that pay little or no business rates
- Business Interruption Loan Scheme
- Bounce Back Loans
- Furlough pay of up to £2,500 for some company directors
Mr Sunak said: "Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.
“That’s why we’re giving bounce back loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.”
Business owners who have taken out the Bounce Back Loan will hear from their bank about how to access the flexible repayment options.
Business secretary, Kwasi Kwarteng, said: “While our vaccine rollout is moving at an incredible pace and the end is in sight, we know times are still tough for many companies and extra support is needed.
“These flexible repayment options will give businesses the time they need to recover from the pandemic before paying back loans, giving them the breathing space and confidence to build back better.”
Businesses have until March 31 to apply for a bounce back loan which are being offered through banks – 29 lenders have made the funds available.
Hundreds of thousands of small businesses could receive a payout from insurers if they have been hit by the coronavirus pandemic after a legal ruling.
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