Bounce Back Loan Repayment and Pay as You Grow options

The Government recently announced that businesses will be given more time to repay bounce back loans under a “Pay As You Grow” initiative.

The below sets out more information on the Government’s Pay As You Grow options, which will be made available to you in due course. We will send you correspondence with more information on how you can apply for Pay As You Grow around three months before your first payment is due. You do not need to take action at this point and you cannot yet apply for Pay As You Grow options.

How we will send you more information

If you use our Digital Banking services and have District, we will write to you through eArchive and we’ll send you an email to let you know when the correspondence is available to read.

If you are not a District customer, but would like to register, please use our District page. If you are not a District user, we will send you a letter in the post.

Digital Signing for faster applications

Digital Signing will help us process your application, on average, up to five days quicker. Documents are delivered straight to our secure Digital Signing Portal, allowing you to sign your application wherever you are, and it's not just for Pay As You Grow!

Digital Signing is available to our customers who are registered and using our online business banking platform, District. For more information see our Digital Signing page.

If you are not a District customer, but want to take advantage of Digital Signing now and in the future, please see our District page and we will be happy to arrange access to our online banking solutions for you.

Managing debt and how you can contact us

Whilst Pay as You Grow options are not yet available, if you are worried about your finances, you can contact us anytime to discuss your individual situation and you don’t have to wait further correspondence before contacting us. We understand this is a difficult and challenging time and we are here to help. Your dedicated Relationship Manager or Small Business Adviser are available to support you so please get in touch with them. If you don’t have a Relationship Manager or Small Business Advisor please contact our Support Team on 0800 633 5783.

You can also review our webpage on financial difficulty for assistance.

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.

You might find the following, UK Finance leaflet on dealing with debt, helpful.

Repaying your Bounce Back Loan

If you received a Bounce Back Loan, you were granted 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 (known as ‘capital’), plus interest from the date your repayment holiday ends.

We will send you correspondence, reminding you of your first monthly repayment date and your monthly repayment amount, around three months before your first payment is due. This correspondence will also give you more information on how you can apply for the Pay As You Grow options, as set out below.

Please note you do not need to contact us at this time or take any action in advance of your repayments starting, you cannot yet apply for Pay As You Grow options.

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.

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 in advance of the repayments of your Bounce Back Loan commencing 12 months after the Bounce Back Loan was drawn. As stated above, we will write to you around three months before your first payment is due to give you more information on how you can apply for the PAYG options.

Using these PAYG options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall.

The options available to you when you are due to make your first payment after 12 months are as follows:

If you expect to be in a better position to repay in the future

  1. 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.
    • On a loan of £35,000 this would reduce monthly payments from £621 to £73 during the six-month period.
    • 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 our calculator to see how monthly payments and total loan cost might change under these PAYG options.
  2. You could take a payment holiday for six months.
    • This option is available once during the term of your Bounce Back Loan.
    • You’ll make no capital repayments or interest payments during this time.
    • The total you owe will go up. This is because your interest costs increase as interest accrues during the payment holiday and you’re repaying your loan over a longer period.
    • You can use our calculator to see how monthly payments and total loan cost might change under these PAYG options.

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%.

  • Extending to 10 years would reduce monthly payments on a loan of £35,000 from £621 to £362.
  • You’ll accrue more interest, so the total amount repayable on a £35,000 loan would increase to £39,096, unless you repay early.
  • You can use our calculator to see how monthly payments and total loan cost might change under these PAYG options.
  • 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.

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. Both options 1a and 1b will be available throughout the course of your loan term.

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 in advance of the repayments of your Bounce Back Loan commencing 12 months after the Bounce Back Loan was drawn. As stated above, we will write to you around three months before your first payment is due to give you more information on how you can apply for the PAYG options.

Using these PAYG options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall.

The options available to you when you are due to make your first payment after 12 months are as follows:

If you expect to be in a better position to repay in the future

  1. 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.
    • On a loan of £35,000 this would reduce monthly payments from £621 to £73 during the six-month period.
    • 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 our calculator to see how monthly payments and total loan cost might change under these PAYG options.
  2. You could take a payment holiday for six months.
    • This option is available once during the term of your Bounce Back Loan.
    • You’ll make no capital repayments or interest payments during this time.
    • The total you owe will go up. This is because your interest costs increase as interest accrues during the payment holiday and you’re repaying your loan over a longer period.
    • You can use our calculator to see how monthly payments and total loan cost might change under these PAYG options.

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%.

  • Extending to 10 years would reduce monthly payments on a loan of £35,000 from £621 to £362.
  • You’ll accrue more interest, so the total amount repayable on a £35,000 loan would increase to £39096, unless you repay early.
  • You can use our calculator to see how monthly payments and total loan cost might change under these PAYG options.
  • 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.

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. Both options 1a and 1b will be available throughout the course of your loan term.

We’re here to help

You do not need to contact us or take any action at this time in advance of your repayments starting. We will send you correspondence, reminding you of your first monthly repayment date and your monthly repayment amount, around three months before your first payment is due. This correspondence will also give you more information on how you can apply for the PAYG options.

However if you’re worried about your finances, please review our web page on financial difficulty.

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 facility letter.

If you have an existing Bounce Back Loan with us, you can apply for a top-up today.

Apply now

BBLS is delivered by the British Business Bank, through Danske Bank as an accredited lender.

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 External link icon.

The provision of the BBLS guarantee does not imply any endorsement or warranty of Danske Bank from the Secretary of State for Business, Energy and Industrial Strategy or the UK Government.