It has been one full year now believe it or not since Rishi Sunak launched his Bounce Back Loan Scheme, and sadly with the failure of the replacement Recovery Loan Scheme, many business owners have just one set of options left to keep their businesses alive, those being the Pay as You Grow options.
With around a month left until the first set of repayments are due for those who took out a BBL in May of last year, some of you out there that are due to make your first repayment are beginning to panic.
I am aware many SMEs have already decided they cannot continue trading and have either started winding up their businesses or are investigating the best ways on how to do so.
It is however true to say that many of you out there will have decided to take the PAYG options or will do when your bank finally gets around to offering them to you, for if nothing else you can at least extend your loan term to 10 years, take an initial 6 month repayment term and then opt to pay just the interest for another 18 months.
A quick word of caution, please do not bury your head in the sand and simply ignore the repayments if they are due, currently all banks are keeping a close eye on all their customers that are due to stay repaying and anyone who does not make a repayment or does not opt to take one or more of the PAYG options will have their accounts looked into closely.
Keep in mind the banks are currently eager to work out just how many BBLs they have lent out to scamsters and they may class you as one of them if you do not make a repayment or opt for the PAYG options, or even contact them to say you are struggling to repay if you are.
Bank are expecting a high take up of the PAYG options, so keep that in mind too, and if you are worried about your credit score by taking any of the PAYG options, Starling Bank have said the following:
“Using these 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.”
If you are worried about the repayments then you can talk to the lender who gave you a BBL, and they have a system in place whereby they can help and advise you.
If on the other hand you feel there is no option but to wind up your business and default on your BBL, then take professional advice on how to go about doing so.
Some of you are also still holding out hope for some possible additional changes to the BBL scheme and will be taking the PAYG options in the hope they will appear at some point in the future. Whether there will be any changes is down to Rishi Sunak and his team, but as it stands there appear to be no changes planned, however Rishi has always been willing to make changes when it is blatantly obvious they are needed.
Those of you who are taking the PAYG options and watching how defaults are handled, be aware I will report on that as and when feedback comes in.
Whatever position you currently find yourself in, over one and a half million BBLs were approved and paid out, so you are not by any stretch of the imagination alone in your situation. If you need help, advice or support reach out for it, as it is there.