Businesses in Britain are being urged to check their options as the first repayments become due on the coronavirus support loans that they took more than a year ago.
Payments will be due from the first week of June, for many early adopters of the UK governments bounce back loans, which launched may last year.
While banks have vowed to treat customers fairly, campaigners have voiced concerns that pressure to recover taxpayer cash may put lenders in a difficult position. Nothing that lending to business is unregulated in the UK, leaving borrowers unprotected by law or the financial conduct authority, Kalyeena Makortoff in the observer says the pandemic-related debt is driving calls to regulate the sector.
The government said it would pick up the 2.5% interest charged by banks and building societies for the first year, however, now 13 months later, some firms will be due to start making payments to their lenders
Most lenders will have an extension form online in which customers can apply for extra time to repay their debt, however, bear in mind that the 2.5% interest starts after the first 12 months and will continue to be added to your loan for up to six years.
The scheme closed for new applications and applications for top-ups on March 31, 2021
The options available options include extending the loan period from six to 10 years, pausing interest payments and loan repayments for one six month period, and paying only interest for three six-month periods
More than 46.5 billion was lent by the UK’s banks to small businesses which needed support during the COVID-19 pandemic.
Nearly 700,000 businesses pounced early and took loans within the first month of its launch last May. Many of the firms will now be due to pay back in the coming weeks.