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Newsletter 10/05/2021

I hope you all enjoyed the weekend. The weather was a bit hit and miss but luckily my local has put up a big marquee so Sunday lunch didn’t need to be cancelled!


Today’s newsletter looks at the Bounce Back Loan repayments which will begin in June. If your business hasn’t picked back up to pre Covid levels then I understand that this may be a daunting prospect.

If you have any questions or would like to discuss what this means for you and your business then please do not hesitate to get in touch. Contact details are at the bottom.



Bounce Back Loan Repayment Deadline

What is the issue?

  • The first Bounce Back Loan (BBL) of up to £50,000 was provided in May 2020.
  • No repayments needed to be made for the first 12 months from taking out the loan.
  • The first BBL repayments will start on 1st June 2021.


What do you need to think about?

  • Did your business take out a BBL?
  • If so, when does the 12 month repayment holiday period come to an end?
  • Is your business in a position to meet these loan repayments?


What options does your business have?

  • You could repay the BBL back early with no repayment penalty incurred for doing so.
  • You could request to take up one or more the Pay As You Grow (PAYG) options announced by the Government in September 2020.


What are the PAYG options?


A) The original BBL repayment term was for 6 years. You can request to extend it to 10 years. This can be done on its own or in conjunction with either options B) or C) below.

B) You can reduce your monthly repayments for six months by paying interest only. This option is available up to 3 times during the BBL term. Or:

C) You can take a repayment holiday for up to 6 months at any time during the course of the loan period. You can take this option up once during the BBL term.

D) The fixed rate of interest will remain at 2.5% if you take up any of these PAYG options.

E) The lender should contact you within 3 months prior to the start of the repayment date to remind you of that fact and to point out the PAYG options.


Factors to consider re the PAYG options

  • It won’t affect your credit score but it may influence your credit worthiness in the future.
  • If you take up any of these options you will pay more in interest over the course the loan.
  • What is the business present financial position?
  • What is the cash flow forecast for the next 12 months or so?
  • Are you contemplating selling the business or retiring in the next few years?

How can we help?

  • We can independently go through the PAYG options with you, looking at how that impacts upon you and your business, taking account of your individual circumstances.
  • We can do management accounts to review your present up to date position.
  • We can put together cash flow forecasts to assist you in whether or not to take up the PAYG options.

If you have any questions, please feel free to get in touch, we're here to help!


info@togetherwecount.co.uk

www.togetherwecount.co.uk

https://g.page/Together-We-Count-Limited?gm

01273 569088
0114 400 0119
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