When the government-backed loan schemes were announced last year, many businesses took out the 100% guaranteed loans to help them manage through the uncertainty that lay ahead, but how businesses are faring one year on is a mixed picture.
Many have been able to pivot business models and adapt, while others have yet to see activity come back and will be considering their position as the conclusion of the furlough scheme approaches and cashflow is needed for loan repayments.
Following the announcement of the Pay As You Grow scheme last year, businesses will have to make choices about what to do if they are unable to repay their Bounce Back Loan within the original terms.
This can be a very stressful time, particularly where borrowers are in a more vulnerable position than they may have previously experienced, and it is important to think carefully and clearly about the implications of decisions made now.
ICAEW’s Financial Services Faculty has created a helpsheet to enable businesses and their advisers to understand the options available to them and what needs to be considered – including other debts – before making a decision.
The helpsheet examines the following questions and highlights where businesses or their advisers can seek further advice.
- When will your lender contact you to start BBLS repayments?
- What you need to consider when deciding your BBLS repayment options
- How can you reduce interest costs on your BBLS loan?
- What repayment option is best for you?
- What protections are available to me?
- Potential sources of help
Read the Financial Services Faculty helpsheet: COVID-19 challenges for business: Bounce Back Loan Scheme repayments
ICAEW Know-How from the Financial Services Faculty: Banking
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