Understanding your Bounce Back Loan

If you’ve received lending under the Bounce Back Loan scheme, including any Top-Up amount, find out more about your commitments and what you can do to prepare for when your repayments begin.

About Bounce Back Loans

The Bounce Back Loan scheme is a government initiative to support small and medium-sized businesses struggling with the impact of coronavirus

If you've borrowed less than 25% of the annual turnover on your original Bounce Back Loan application, you could apply for a top-up from £1,000 subject to an overall cap of £50,000. Eligibility criteria applies. More about Top-Up

Reminder of your Bounce Back Loan terms and conditions
When you applied for your Bounce Back Loan, you declared that you understood that: 

You are fully liable for all repayments, and if you are unable to meet these obligations, this could negatively affect your credit score.

The 100% government guarantee is provided to cover any losses the lender makes and does not cover any losses that you might suffer if you are unable to meet your payment obligations.

We would not carry out any affordability checks on your application.

For the full set of declarations you made, please refer to your Bounce Back Loan application form.

Your Bounce Back Loan term

Bounce Back Loan interest rate

  • Interest on your Bounce Back Loan, including any Top-Up amount, is fixed at 2.5% per year
  • Interest is calculated and accrued daily
  • Interest during the first 12 months will be paid by the government. Remember that you are responsible for paying back the whole loan, including any interest accrued after the first 12 month period

Repaying your Bounce Back Loan 

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

We will send you a repayment schedule outlining your options, around three months before your first payment is due. 

Please note you do not need to contact us in advance.

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, as well as additional payments on a regular basis, and doing so will also help save you money on your interest payments. 

Pay As You Grow

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 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 six months by paying interest only.

This option is available up to three times during the term of your Bounce Back Loan.


b)    You could take a payment holiday for six months. 

This option is available once during the term of your Bounce Back Loan.

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

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

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.

How Pay as you Grow could affect loan repayments

PAYG options may increase your repayments and the total amount you owe as interest costs increase if you repay your loan over a longer period.
* The monthly repayment amount shows the approximate monthly repayments after the 6 month Capital repayment holiday or Capital and Interest repayment holiday ends and loan repayments recommence. Examples also include a 6 month extension applied on the original loan term.

Preparing for your repayments to begin

More questions about Pay as you Grow?

Visit our Frequently Asked Questions to find further guidance and support

We’re here to help

You do not need to contact us in advance. We will send you a repayment schedule outlining your options, around three months before your first payment is due.

However if you’re worried about your finances, the quickest way to get in touch is via our webchat service, Cora. Using webchat, you can:

get help with an existing loan

talk to us about other support

If you are struggling with your finances, you can get free debt advice. 

We partner with PayPlan (a third party company), who can offer you free confidential advice for all of your debts. 

Start your journey with PayPlan

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Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy.

British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.

Visit british-business-bank.co.uk.

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