Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the viability of calls from UK Hospitality to (a) extend the repayment period for all Government-backed loans to ten years, (b) extend the interest free period of such loans by 12 months and (c) increase the maximum Bounce Back Loans available to small businesses from £50,000 to £100,000.

Any business concerned about their ability to repay their loan should discuss this with their lender in the first instance.

In order to give businesses further support and flexibility in making their Bounce Back loan repayments, the Chancellor has announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their BBLS facility over ten years. This will reduce businesses’ average monthly repayments on the loan by almost half. Businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments). We have also amended the CBILS rules to allow lenders to extend loan terms from six to a maximum of ten years where they judge that this will help borrowers repay their loan.

For any businesses seeking finance above the £50,000 threshold for BBLS, eligible businesses can take out a CBILS loan and use part of this facility to refinance their existing BBLS loan. Businesses in this situation should speak to lenders about their financing options and eligibility for CBILS. Businesses can use any of the 100+ accredited CBILS lenders to refinance, and not just the lender they have the existing BBLS loan with.

Together, these measures provide a generous support package giving businesses the time to get back on their feet.