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HSBC Bounce Back Loan Repayment Extension in the United Kingdom in 2023

In April 2020, the government launched their Bounce Back Loan Scheme (BBLS) to help small and medium-sized businesses through the coronavirus pandemic. It allowed companies to borrow up to u00a350,000, depending on turnover, at a very low-interest rate and without having to pay a penny towards paying back the loan for 12 months.<br>The Government worked with several leading financial institutions, including NatWest, Santander, TSB, Barclays and the HSBC Bounce Back Loan, to lend from u00a32,000 up to 25% of the businessu2019s turnover (a maximum of u00a350,000).<br>

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HSBC Bounce Back Loan Repayment Extension in the United Kingdom in 2023

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  1. HSBC Bounce Back Loan Repayment Extension in the United Kingdom in 2023 In April 2020, the government launched their Bounce Back Loan Scheme (BBLS) to help small and medium-sized businesses through the coronavirus pandemic. It allowed companies to borrow up to £50,000, depending on turnover, at a very low-interest rate and without having to pay a penny towards paying back the loan for 12 months. The Government worked with several leading financial institutions, including NatWest, Santander, TSB, Barclays and the HSBC Bounce Back Loan, to lend from £2,000 up to 25% of the business’s turnover (a maximum of £50,000). There were several benefits to the Bounce Back loan: ● ● Businesses didn’t start making repayments for 12 months. The Government 100% guaranteed the loan and paid the first year’s interest to the lender. The low-interest-rate was fixed at 2.5% for the entire period of the loan without penalty. It was an unsecured loan and therefore businesses weren’t required to make any personal guarantees nor put up any collateral for the loan. There aren’t any early repayment charges, so a business can pay back the loan in less than six years without penalty. ● ● ● As the pandemic continued into a second year and restrictions were still in place, the Chancellor launched a new repayment scheme for businesses and organisations that had secured a Bounce Back loan from the Government.

  2. Borrowers are offered three options by their lenders under the PAYG scheme: ● To apply for an extension of the loan term from 6 years to 10 years at the continued fixed rate of interest of 2.5%. ● To reduce their monthly repayments for six months by paying the interest only on the loan for that period. Borrowers are entitled to this option as many as three times during the term of their Bounce Back loan. ● To choose a repayment holiday for a maximum of 6 months. This option is only available once to borrowers. Borrowers are able to select one or more of the options, depending on their circumstances. It must be remembered that with the repayment holiday or reduced repayment options, borrowers will ultimately end up paying more interest over a longer period of time. The

  3. scheme is managed by the lender, not the Government. Opting for PAYG doesn’t affect the borrower’s credit rating in the future either. However, if borrowers apply for further lending from their lender, it could impact their creditworthiness assessment by the lender.

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