February 8th, 2021.


The British Business Bank, the UK’s economic development bank, today announces further details of Pay As You Grow, which helps UK smaller businesses that have taken out a Covid-19 emergency Bounce Back Loan to manage their cashflow and have a better chance of getting back to growth.

Originally announced by the Chancellor of the Exchequer in September 2020, Pay As You Grow (PAYG) will enable businesses who have started repaying their Bounce Back Loans to:

- request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%

- reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan

- take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.

Borrowers can use these options individually or in combination with each other[1], and remain responsible for repaying their Bounce Back Loan and fully liable for the debt.

Lenders will start to communicate Pay As You Grow (PAYG) options to Bounce Back Loan Scheme borrowers three months before repayments commence. Lenders will inform their customers about PAYG directly, so borrowers should wait until they are contacted by their lender before enquiring about the scheme. Lenders will advise customers about how their payment profiles may change according to their choices under the scheme. Businesses first began to receive BBLS loans in May 2020 and the first repayments will become due from May 2021 onwards.

Richard Bearman, Managing Director, Small Business Lending, British Business Bank, said: “Pay As You Grow will provide tangible benefits to Bounce Back Loan recipients, many of whom may have accessed the Bounce Back Loan Scheme to borrow money for their business for the first time. The scheme offers greater flexibility to businesses who may need flexibility in paying off their Bounce Back Loan and enables them to manage their repayments more effectively.”

Business Secretary Kwasi Kwarteng said: “The comprehensive and generous financial support package we have delivered across the UK has protected jobs, saved businesses and kept local economies on the move.

“While our vaccine rollout is moving at an incredible pace and the end is in sight, we know times are still tough for many companies and extra support is needed.

“These flexible repayment options will give businesses the time they need to recover from the pandemic before paying back loans, giving them the breathing space and confidence to build back better.”


The Bounce Back Loan Scheme launched on the 4th of May 2020. It provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the Covid-19 pandemic. Since May 2020, the scheme has supported nearly £45bn of loans to 1.5m businesses.

Businesses can apply for a loan from £2,000 up to 25% of their business’ turnover, with a fixed interest rate of 2.5% for the duration of the loan, meaning all borrowers benefit from the same, affordable rate of interest. The maximum loan amount is £50,000, and the Government will make a Business Interruption Payment (BIP) to cover the first 12 months of interest payments. The borrower does not have to make any repayments for the first 12 months.

Businesses who have concerns regarding repaying debt should contact their lender, and can find additional links to resources on the British Business Bank’s Finance Hub.

www.british-business-bank.co.uk/