Supporting UK businesses during coronavirus, the Bounce Back Loan Scheme is now closed.
Greater flexibility with repayments – Pay As You Grow (PAYG)Businesses that took out government-backed Bounce Back Loans to get through Covid-19 have greater flexibility to repay their loans.
Repayment options and amounts will change depending on the selections made under the scheme. Borrowers are responsible for repaying their Bounce Back Loan and remain fully liable for the debt.
Pay As You Grow (PAYG) enables businesses who are repaying their Bounce Back Loans to:
Request an extension of your loan term to 10 years from 6 years, at the same fixed interest rate of 2.5%
Reduce your monthly repayments for 6 months by paying interest only. This option is available up to 3 times during the term of your Bounce Back Loan
Take a repayment holiday for up to 6 months. This option is available once during the term of your Bounce Back Loan.
You can use these options individually or in combination with each other. You should be aware that you will pay more interest overall if you use one or more of these options, and that the length of the loan will increase in line with any repayment holidays taken.
If you want Pay As You Grow to start from your next loan repayment, you need to apply and confirm your selection at least 7 days before your next payment is due.
Bounce Back Loan Scheme Frequently Asked QuestionsWhat other repayment options are available to me?
To help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.
Pay As You Grow options will be available to you once you start to repay your Bounce Back Loan, from 12 months after it was first drawn.
Using these options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall. The options available to you when you are due to make your first payment after 12 months are as follows:
1. If you expect to be in a better position to repay in the future:
You could reduce your monthly repayments for six months by paying interest only. This option is available up to three times during the term of your Bounce Back Loan. OR:
You could take a payment holiday for six months. This option is available once during the term of your Bounce Back Loan.
2. If you’re only able to repay a smaller amount:
You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5%. If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
Please note for all three options that the total amount you owe will go up . This is because your interest costs increase as you’re repaying your loan over a longer period.
You can use options 1 and 2 together if you need to, but only to a maximum term of ten years. Using these options together may require you to repay more over the lifetime of the loan, when compared to using one or none of these options. Both options 1a and 1b will be available throughout the course of your loan term.
Log into Business Internet Banking to make your selection here, or to Register, click here.
These standardised options will be communicated to all borrowers 3 months before repayments start.
What are the Bounce Back Loan terms and conditions?
When you applied for your Bounce Back Loan, you declared that you understood that:
The full set of declarations you made will be on your Bounce Back Loan application form. Additional terms and conditions you agreed to are detailed in your facility letter.
Do I need to use the same bank account to make my repayments that I used to apply for the Bounce Back Loan?
No – you don't need to use the same bank account that you used to apply for your Bounce Back Loan to make repayments. You can use another HSBC bank account, or a bank account at another bank (in each case, subject to usual transaction checks).
When are repayments due on the top-up?
No repayments are required up to the date on which the capital repayment holiday on your existing Bounce Back Loan expires (i.e. 12 months after the initial draw-down of the original loan amount). Please note that your repayments and interest cost will be higher as a result of receiving a top-up. These will be displayed in your updated loan agreement if your application for a top-up is successful.
What happened to the loan repayments in the first 12 months?
Customers received a payment holiday for the first year of their loan, with the interest being paid by the Government, via a Business Interruption Payment.
After the first 12 months, customers will need to start making monthly repayments to repay the amount borrowed, plus interest from the date that the repayment holiday ends.
We will send a repayment schedule to customers outlining available options around three months before the first payment is due. There is no need to contact us in advance.
What happens if I have a Bounce Back Loan and can’t make the payment on the loan after 12 months?
If you’re concerned that you can’t meet the repayments on your loan after 12 months, then please call the Coronavirus Customer Support Line as soon as possible on 03457 606060 (lines are open Monday to Friday, 8am to 8pm and Saturday, 8am to 2pm - subject to change over certain periods).
We’ll assess your situation and discuss your options.
What happens if I no longer need my Bounce Back Loan?
If you no longer need the loan, you can choose to pay it back early. You’ll then pay less interest. There are no early repayment charges and you won’t pay any interest if you pay the full amount before the end of your initial 12-month repayment holiday.
Or you can make a one-off repayment, as well as additional payments on a regular basis, and doing so will also help save you money on your interest payments.
What was the Bounce Back Loan Scheme?
The Bounce Back Loan Scheme (BBLS) was designed to support small and medium-sized businesses that were impacted by the Coronavirus situation and who were looking to borrow between £2,000 and £50,000.
The Government guaranteed 100% of the loan but the customer remained liable for the entire loan amount. Banks will seek to recover 100% of the outstanding balance of the loan from the Borrower before any claim is made on the Government guarantee.
Can I switch my banking to another bank if I have an outstanding BBL with HSBC?
Yes. You can switch your banking to another bank and keep your Bounce Back Loan (BBL) with us. You'll just need to make sure your Direct Debit for the BBL is switched across to your new bank to maintain your repayments.
If you're using the CASS (Current Account Switching Service), this will happen automatically. If you've chosen to switch without using CASS, you'll need to contact us to change the account details on your BBL Direct Debit by calling 03457 606060 (lines are open Monday to Friday, 8am to 8pm and Saturday, 8am to 2pm - subject to change over certain periods).
Do I need to continue to maintain a bank account with HSBC during the term of the Bounce Back Loan?
No – you don't need to maintain a bank account with HSBC during the term of your Bounce Back Loan. You're free to use another provider to manage your business banking, and you can switch your business current account to another provider while you maintain your loan with HSBC. You're able to make repayments from another bank account at another bank (subject to usual transaction checks).