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Sunak helps out

Firms given more time to repay government loans

Rishi Sunak at Tory conference 2020

Rishi Sunak: determined to restore confidence

Small firms will get more time to repay government loans taken out to help them get through the coronavirus lockdown.

They will be given greater flexibility including an option to extend the length of the loan from six to ten years.

Chancellor Rishi Sunak said he wanted to avoid a wave of company failures by giving them more “breathing space” as they recover from the impact of the pandemic.

About £45bn has been borrowed by more than 1.4 million small firms under the Bounce Back Loan scheme, which offers cheap loans of up to £50,000.

Under the existing scheme, firms get interest-free loans for the first year. But many will start repaying the money in May even though the economy will still be under some form of lockdown restrictions.

Mr Sunak said: “Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.

“That’s why we’re giving Bounce Back Loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.”

Under the new arrangements businesses will have the options of:

  • Extending the length of the loan from six years to ten
  • Making interest-only payments for six months, with the option to use this up to three times throughout the loan
  • Pausing repayments entirely for up to six months

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