Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assurances he has sought from lenders of the (a) Coronavirus Business Interruption Loan Scheme and (b) Bounce Back Loan Scheme that they are being flexible in assisting borrowers in restructuring and refinancing their debt to avoid default.

Any business concerned about repayments should get in touch with their lender who will be able to provide support and talk them through their options.

In order to give businesses who have borrowed under the Bounce Back Loan Scheme further support in making their repayments, the Government announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their Bounce Back Loan over ten years. This will reduce their 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). They can also pause their repayments entirely for up to six months. If borrowers want to take advantage of these options, they should notify their lender when they are contacted about their repayments.

For those who borrowed under the Coronavirus Business Interruption Loan Scheme (CBILS), the Government has taken action to allow lenders to provide borrowers with more time to make their repayments where they assess that borrowers are in difficulty and will benefit from the extension. Given loans under CBILS are more varied than the standardised BBLS and resemble more traditional commercial lending, CBILS borrowers are likely to benefit from engagement with their lender if they have concerns about repayments. Lenders have an ongoing relationship with CBILS borrowers and will be best placed to provide support tailored to an individual business’s circumstance.