Originally announced by the Chancellor of the Exchequer in September 2020, Pay As You Grow (PAYG) will enable businesses who have started repaying, or are about to start paying their Bounce Back Loans to:
- request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
- reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan
- take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.
Borrowers can use these options individually or in combination with each other.
Borrowers should be aware that they will pay more interest overall if they use one or more of these options, and that the length of the loan will increase in line with any repayment holidays taken.
If you wish to utilise any of these options, email firstname.lastname@example.org with the subject line 'PAYG'. Please note, you will need to provide at least 5 business days notice of any PAYG option you wish to take to allow enough time for Capital on Tap to make the changes to your account.
Using these options won’t affect your credit score, or negatively affect your credit file. We may use requests for Pay As You Grow options to help us assess affordability in future lending applications, for example we will take into consideration incomings and outgoings, including existing debt repayments such as the Bounce Back Loan, and also your total debt exposure, which will include the outstanding Bounce Back Loan.
Further information on the scheme can be found in the video below or on the British Business Bank's website.