July 29th, 2020.
The Treasury is pushing for the bounce back loan repayment period to be doubled from five years to 10 years. Both Government and banks that have jointly lent £33bnthrough the bounce-back scheme are afraid of the looming wave of non-repayment.
More than a million small companies have borrowed under the bounce back scheme, which offers loans of up to £50,000 and are covered by a 100-per-cent state guarantee.
The loans were launched in May after an outcry about the criteria attached to the coronavirus business interruption loans, which made it difficult for small businesses to qualify. However, the Office for Budget Responsibility estimates that £53bn will eventually be handed to small firms in bounce back loans, with 40 per cent likely to default. This equates to costing the taxpayer £16bn in bad loans.
For the full story at smallbusiness.co.uk CLICK HERE.