Pay As You Grow
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.
Your other repayment options
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 will 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.
OR:
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. If you choose to extend your loan term to 10 years in addition to any payment holidays under options 1a or 1b, your loan repayment amount will increase at the end of each payment holiday as you cannot extend the term of the loan past 10 years.
Please note for all three options that the total amount you owe will go up. This is because your interest costs increase as you’re repaying your loan over a longer period.
You can use options 1 and 2 together if you need to. All options (1a, 1b and 2) will be available throughout the course of your loan term.
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 please contact our dedicated Business Support Team, who are experienced in supporting customers who are in financial difficulty.
You can reach the Business Support Team by emailing SupportingSMEs@co-operativebank.co.uk
- Please only include your name, the name of your business and the contact number to reach you on and we will aim to contact you within 48 hours of the receipt of your request.
- For security reasons, please do not include any sensitive or confidential information in your email.
You can also contact the following organisations for free advice
Business Debtline
Business Debtline gives free and independent debt advice over the phone and online.
Visit the Business Debtline website
Federation of Small Businesses
The Federation of Small Businesses is a not-for-profit offering financial expertise and advice to its membership of small businesses and the self-employed.
Money Advice Service
The Money Advice Service offers free and impartial money advice, including debt support, via a range of channels including telephone, web consultation and WhatsApp.
Visit the Money Advice Service website
StepChange
StepChange is a UK charity which offers free debt advice based on an assessment of your situation, as well as practical help and support.
Citizens Advice
The Citizens Advice Bureau offers free and impartial advice for people experiencing financial and debt-related problems.
Visit the Citizens Advice website
Other business finance support options
In addition, the British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.
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.
Calculating your payments
If you are considering making a change to your Bounce Back Loan the first step is to review your options, and make your choice based on your circumstances.
To help you with this decision you may want to calculate what your payments could be.
If you want to select one of the payment holidays in Option 1, either a full 6 month repayment holiday or a 6 month holiday where you just pay the interest, you have the choice of either keeping your existing loan term or extending your term by 6 months. However, if you already have extended your term to 10 years (Option 2), or would like to, then you cannot extend your term by a further 6 months. This is because the maximum loan term allowable is 10 years.
If you want an indication of what your repayments might be, you can download our Repayment Calculator.
- Please note that the Repayment Calculator is in Excel format. Clicking the above link will download an Excel document.
Important information
This calculator is for illustrative purposes only to help indicate the potential impact of Pay As You Grow options. Your amended repayment profile will be confirmed to you once we’ve received your Pay As You Grow request and you will be required to sign loan documentation to confirm that you agree to this.
Requesting a change to your Bounce Back Loan
If you have considered all the options available to you and would like to make a change to your Bounce Back Loan then you can do so by completing our Request Form. The whole process only takes a few minutes to complete but we will ask you for your Business Current Account Sort Code and Account number, so it’s important to have this to hand before you start.
Important information
- Changes to your loan cannot be made until 90 days before your first payment is due, or your current payment holiday ends. Any requests made outside of this time will not be processed. You may only select one payment holiday at a time.
- When we receive your request it will be reviewed, and a variation letter sent to you confirming the changes you are looking to make, as well as details of your new payments and schedule. Please note that changes cannot be made to your Bounce Back Loan unless we have received your variation letter signed in accordance with your account mandate within the timescale specified in the letter.
- Changes to your loan account could take up to 15 Business Days to process, and will come into effect at your next payment due date. It is important that you allow plenty of time for us to make any changes to your account. You must complete the Request Form not less than 15 Business Days before the first payment you wish to change is due. If your request is made less than 15 Business days before your next payment is due, we will still process your request, but it will be processed for the following payment and you will need to make your next scheduled loan repayment in full.
- If you feel you may struggle it is important to talk to us. You can do this by contacting our dedicated Business Support Team, who are experienced in supporting customers who are in financial difficulty.
- You can reach the Business Support Team by emailing SupportingSMEs@co-operativebank.co.uk
- Please only include your name, the name of your business and the contact number to reach you on and we will aim to contact you within 48 hours of the receipt of your request.
- For security reasons, please do not include any sensitive or confidential information in your email.
What happens when I request to make a change?
Once we have received your Request Form, we will prepare a variation letter for you, detailing your new payment structure. You will then have the opportunity to review the variation letter and consider what it means for you and your future payments.
Once you are happy with this, you need to sign it in accordance with your account mandate to accept its terms and return it to us at: payasyougrowoffers@co-operativebank.co.uk
The variation letter will contain an expiry date by which the Bank needs to have received it, signed in accordance with the mandate, to implement its terms. This expiry date will be 5 Business Days prior to the relevant monthly payment date to give the Bank time to process the necessary changes. Please therefore ensure that you return the signed variation letter to us in advance of this expiry date.
We will then process your request, make the necessary changes to your loan account and send you a final confirmation that this has been actioned. This process can take up to 5 Business Days. As stated above, if we receive the variation letter after the expiry date stated in the letter, you will need to make your next payment in full as previously agreed. It will be too late to agree changes in time for your next monthly payment, so we would need to send you another variation letter to agree changes to your loan in time for the following payment.
Please therefore make every effort to return the variation letter before the expiry date referred to in it. If we do not receive the signed variation letter you will continue to make payments under the original loan terms.
Disclaimer:
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
Please note that Bounce Back Loans aren’t subject to the usual consumer protections that apply to business lending. This means you won't have the benefit of the protection and remedies that would otherwise be available to you under the Financial Services and Markets Act 2000, or the Consumer Credit Act 1974. If you're in any doubt as to the consequences of this, we recommend you seek independent legal advice.
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