image of a computer screen with "Pay as you grow options" written on for website J&J Commercial Finance

Pay as you Grow – BBL

Officially announced in September 2020 the Pay As You Grow (PAYG) will support business who are repaying their Bounce Back Loans (BBL). As we approach a year since the scheme started and repayment starting for many businesses its worth noting how PAYG can help your business and manage your repayments should it be needed.

Your lender should have informed you about your repayments starting on your BBL and also about the PAYG options. If your not due to start repaying your BBL yet then its best to wait until your lender contacts you.

Will using PAYG affect my ability to obtain finance in the future?

Using Pay As You Grow will not, in principle, affect a business’s ability to obtain finance in the future. Pay As You Grow is designed to alleviate borrowers’ financial difficulty, even before it arises, by giving borrowers flexibility in meeting their repayment obligations. Whilst using PAYG will not impact on your credit score it may be taken into account when lenders undertake creditworthiness assessments. For example it will look at outstanding debt, along with expenditure and income.

What are the options available via Pay As You Grow?

There are three options available under Pay as you Grow and Borrowers can look to use these options individually or as a combination. You 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.

  1. Extend your term – Extend your loan term from six years to 10, at the same fixed interest rate of 2.5%.
  2. Payment Holiday – Take one six month repayment holiday
  3. Reduce payments – Reduce payments for six months by paying interest only (available up to three times during the term of your loan).

If you are thinking about Pay as you Grow then you will need to contact your lender directly to discuss the options available. Or find out more information on the British Business Banks website

If you are looking for alternative forms of lending then contact us to discuss your options