Updated: 9th August 2021
Bounce Back Loans were introduced by the government in an effort to give SMEs quick and easy access to funding during the Covid-19 pandemic. Bounce Back Loans were offered by a range of lenders including major high street banks such as Santander, Natwest, Lloyds, RBS, Barclays, and HSBC.
If you have a Bounce Back Loan with one of these banks, there is help available if you are struggling to meet your contractual repayments. Much of this help comes through a government scheme known as Pay As You Grow (PAYG) which is designed to provide assistance to those companies who are experiencing cash flow problems now Bounce Back Loan repayments have become necessary.
Find out how these banks are helping their customers when it comes to repaying their Bounce Back Loans.
HSBC provided Bounce Back Loans to new and existing business customers when they were first introduced in March 2020. These were offered with a fixed rate of interest over six-year terms. While no repayments were due for the first year, companies are now having to find the money to service the monthly cost of their Bounce Back Loans.
If you are having problems finding the money to pay your Bounce Back Loan, a HSBC Bounce Back Loan extension could be a way to reduce the monthly cost to a more sustainable and manageable level. As part of the Pay As You Grow (PAYG) Scheme, Bounce Back Loans taken out with HSBC can now be paid over 10 years rather than the original six-year agreement. This will reduce the monthly payment amount, however, as the loan is being taken out over a longer period, more interest will be payable over the life of the loan.
HSBC did offer Bounce Back Loan top ups, although this option ended on 31 March 2021; however, you can still choose to delay your HSBC Bounce Back Loan by taking a six-month payment holiday. Interest will continue to build during any repayment holiday so you will need to factor this into future.
If you can’t pay your HSBC Bounce Back Loan, this could hint at deeper financial problems with your limited company. If you are struggling with the monthly cost of your HSBC Bounce Back Loan, as well as dealing with other creditors, a licensed insolvency practitioner is able to give you the help you need. They can help you understand the options available and what each solution will mean for you, your company, and your Bounce Back Loan.
If you are concerned that you cannot keep up with your Natwest Bounce Back Loan repayments, there are options open to you. The Pay As You Grow scheme offers a range of payment solutions to help make repaying an outstanding Bounce Back Loan that little bit easier. Through PAYG, you can delay your Natwest Bounce Back Loan repayments by taking a six-month payment holiday. During this time you will not be expected to pay anything towards your Bounce Back Loan, although interest will continue to be applied and will be added onto the balance of the loan.
Alternatively, you can apply for a Natwest Bounce Back Loan extension which will see you make repayments over 10 years rather than six. While this will help your immediate Bounce Back Loan repayment problems, it will mean you repay more over the life of the loan due to spreading your payments over a longer duration.
Natwest no longer offer Bounce Back Loan top ups, meaning that if you need access to further funds, this cannot be done through the Bounce Back Loan scheme. Instead you will have to source this borrowing through alternative channels such as obtaining a traditional loan, or accessing a form of asset funding such as invoice financing or discounting.
If you know your company can’t pay its Natwest Bounce Back Loan even with the help on offer, you should make it a priority to seek expert help and advice from a licensed insolvency practitioner.
If you find yourself in a position where you can’t pay your Lloyds Bounce Back Loan, you should make it a priority to understand the possible solutions which could help ease the immediate financial burden.
You can apply for an extension of your Lloyds Bounce Back Loan by increasing the term from six-years up to 10 years. This will reduce your monthly repayment amount but this option will cost you more over the loan term. Lloyds Bounce Back Loan repayments can also be delayed by taking a six-month payment holiday. During this time no monthly repayment will have to be made, although interest will continue to accrue.
Bounce Back Loan top ups were available to those Lloyds customers who did not take out the full amount they were entitled to, however, applications for this closed 31 March 2021. If your company is in need of additional funding, this will have to be sourced through an alternative channel such as invoice or asset finance or a traditional loan from a commercial lender.
If you are concerned that you are going to be unable to repay your Lloyds Bounce Back Loan, taking expert advice from a licensed insolvency practitioner can help you understand your options
You are now able to apply for an extension to your existing RBS Bounce Back Loan, meaning you will repay the money borrowed over 10 years rather than six. This will reduce the amount due on a monthly basis, although it will increase the overall cost as interest will be payable for longer. You should think carefully before taking this option, as it could lead to problems paying your RBS Bounce Back Loan further down the line.
If you would like to delay your RBS Bounce Back Loan repayments, this can be done by taking a payment holiday. One payment holiday of up to six months can be taken over the course of your outstanding RBS Bounce Back Loan.
While RBS Bounce Back Loan top ups are no longer available, you may be able to access additional funding through another lender, however, this will not be on the same terms as a Bounce Back Loan. If you are looking for additional borrowing because you can’t pay your RBS Bounce Back Loan, you may benefit from talking to a licensed insolvency practitioner.
Adding yet more borrowing onto an already indebted company is often a recipe for disaster and only serves to delay any underlying problems with the company. If you are worried about making the repayments on your RBS Bounce Back Loan, you should take this as a warning sign that your company may be experiencing acute financial distress. Taking advice from a licensed insolvency practitioner at this early stage significantly increases your chances of being able to turn your company’s situation around.
If you can’t pay your Santander Bounce Back Loan, you should consider the options available for extending or delaying repayments, and understand the longer-term implications of these potential solutions.
While Santander no longer offer Bounce Back Loan top ups, there are still a number of ways you can obtain short-term repayment assistance. Through the PAYG scheme, Santander provide extensions to those companies which would like to spread their repayments over a longer term. Santander originally offered Bounce Back Loans over six-years, however, any loans taken out over this period can now be repayed over 10 years.
While opting for this will lengthen the time you will be repaying your Bounce Back Loan to Santander - as well as increasing the total interest payable - it can help minimise immediate problems when it comes to affording your Santander Bounce Back Loan.
If you would prefer to keep your term to the original six years, you can ask to Santander to delay your Bounce Back Loan repayments through a payment holiday. Santander allow one Bounce Back Loan repayment holiday over the duration of the loan which can be applied for up to six-months. This can be extremely valuable to those companies who simply need a bit of time for their cash flow situation to improve; however, if you are considering this option you should be aware interest will be added to the balance of the loan which will need to be factored into your calculations.
Along with other high street banks, Barclays offer their customers a number of ways to help if they find themselves in a position where they can’t pay their Bounce Back Loan. You can apply for an extension to your Barclays Bounce Back Loan, or even delay making monthly repayments for up to six months. While both of these options will help to reduce the financial cost in the short-term, both will increase the total amount you will need to repay as interest will continue to accrue until your Barclays Bounce Back Loan is fully paid off.
As of March 2021, you are no longer able to top up your Barclays Bounce Back Loan. Interest on your Bounce Back Loan is fixed for the duration of the term, however, even if you choose to extend your term to 10 years.
For many with a Barclays Bounce Back Loan, this is not the only form of borrowing their company has. If you are struggling keeping up with the repayments on your Barclays Bounce Back Loan, as well as your obligations to other creditors, the experts at Real Business Rescue can help you understand your options.
If you would like to extend the term of your Bounce Back Loan or apply for a payment holiday, you should contact your lending bank directly. For help and advice if you cannot repay your Bounce Back Loan, or if you are experiencing any other form of financial distress, contact the experts at Real Business Rescue on 0800 644 6080 for advice from a licensed insolvency practitioner. With over 100 offices up and down the country, you are never far from expert help and advice.