Understanding your Bounce Back Loan | Ulster Bank

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Update on your Bounce Back Loan repayments


If you've received a text about your BBL, you don’t need to contact us now. You’ll be able to apply for the Pay As You Grow options 60 days before your first repayment.

Find out more about your Pay as you Grow options
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Understanding your Bounce Back Loan


If you’ve received lending under the Bounce Back Loan scheme, including any Top-Up amount, find out more about your commitments and what you can do to prepare for when your repayments begin.

About Bounce Back Loans

  • The Bounce Back Loan scheme is a government initiative to support small and medium-sized businesses struggling with the impact of coronavirus
  • If you've borrowed less than 25% of the annual turnover on your original Bounce Back Loan application, you could apply for a top-up from £1,000 subject to an overall cap of £50,000. Eligibility criteria applies. More about Top-Up

Reminder of your Bounce Back Loan terms and conditions

When you applied for your Bounce Back Loan, you declared that you understood that: 

  • You are fully liable for all repayments, and if you are unable to meet these obligations, this could negatively affect your credit score.
  • The 100% government guarantee is provided to cover any losses the lender makes and does not cover any losses that you might suffer if you are unable to meet your payment obligations.
  • We would not carry out any affordability checks on your application.
  • For the full set of declarations you made, please refer to your Bounce Back Loan application form.

Your Bounce Back Loan term

There are currently no changes to the 6 year term of your loan. Any Top-Up amount will expire on the same date as your original Bounce Back Loan.

The government recently announced changes that will allow borrowers to extend the term to 10 years.

We’re working with the British Business Bank to confirm how this will work. We’ll provide more details when they are available, there’s no need to get in touch at present.

Bounce Back Loan interest rate

  • Interest on your Bounce Back Loan, including any Top-Up amount, is fixed at 2.5% per year
  • Interest is calculated and accrued daily
  • Interest during the first 12 months will be paid by the government. Remember that you are responsible for paying back the whole loan, including any interest accrued after the first 12 month period

Repaying your Bounce Back Loan

  • You received a payment holiday for the first year of your loan, with the interest being paid for by the Government via a Business Interruption Payment. After the first 12 months, you will need to start making monthly repayments to repay the amount you borrowed, plus interest from the date your repayment holiday ends.
  • We will send you a repayment schedule outlining your options, around three months before your first payment is due. 
  • Please note you do not need to contact us in advance.
  • 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. 

Pay As You Grow

The Government has announced Pay As You Grow options for Bounce Back Loan borrowers 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 approved.

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:

 

a) 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: 

b) 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 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.

How Pay as you Grow could affect loan repayments

PAYG options may increase your repayments and the total amount you owe as interest costs increase if you repay your loan over a longer period.

Original Bounce Back Loan amount:

 
Accordion

Icon expand £10,000

Monthly repayment Total payable Extra amount to repay
Original loan amount - £10,000 £177.47 £10,648.42 n/a
Capital repayment holiday* £177.47 £10,773.08 £124.66
Capital & Interest repayment holiday* £179.69 £10,781.16 £132.74
Extend loan term to 10 years £103.50 £11,177.52 £529.10

 

* The monthly repayment amount shows the approximate monthly repayments after the 6 month Capital repayment holiday or Capital and Interest repayment holiday ends and loan repayments recommence. Examples also include a 6 month extension applied on the original loan term.

Accordion

Icon expand £20,000

Monthly repayment Total payable Extra amount to repay
Original loan amount - £20,000 £354.95 £21,296.83 n/a
Capital repayment holiday* £354.95 £21,546.15 £249.32
Capital & Interest repayment holiday* £359.37 £21,562.32 £265.49
Extend term to 10 years £206.99 £22,355.04 £1,058.21

 

* The monthly repayment amount shows the approximate monthly repayments after the 6 month Capital repayment holiday or Capital and Interest repayment holiday ends and loan repayments recommence. Examples also include a 6 month extension applied on the original loan term.

Accordion

Icon expand £35,000

Monthly repayment Total payable Extra amount to repay
Original loan amount - £35,000 £621.16 £37,269.46 n/a
Capital repayment holiday* £621.16 £37,705.76 £436.30
Capital & Interest repayment holiday* £628.90 £37,734.05 £464.59
Extend term to 10 years £362.23 £39,121.32 £1,851.86

 

* The monthly repayment amount shows the approximate monthly repayments after the 6 month Capital repayment holiday or Capital and Interest repayment holiday ends and loan repayments recommence. Examples also include a 6 month extension applied on the original loan term.

Accordion

Icon expand £50,000

Monthly repayment Total payable Extra amount to repay
Original loan amount - £50,000 £887.37 £53,242.08 n/a
Capital repayment holiday* £887.37 £53,865.37 £623.28
Capital & Interest repayment holiday* £898.43 £53,905.79 £663.71
Extend term to 10 years £517.48 £55,887.61 £2,645.53

 

* The monthly repayment amount shows the approximate monthly repayments after the 6 month Capital repayment holiday or Capital and Interest repayment holiday ends and loan repayments recommence. Examples also include a 6 month extension applied on the original loan term.

These are representative examples only and won’t accurately reflect your individual circumstances. You’ll soon be able to log in to see the details of your specific loan and apply for PAYG options. We’ll send you more details shortly.  There’s no need to get in touch at present.

Preparing for your repayments to begin

Support if you're struggling financially

Where you have had a direct financial impact caused by the coronavirus, there may be support available to you. 

For more information about the government support available and how to access it, visit our government schemes page. 

Other business finance support options

In addition, the British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.  

 

Other business finance support options can be found on the British Business Bank Finance Hub pages.

 

Dealing With Debt (3MB PDF)

Independent organisations that can provide free advice and support

If you believe that you are experiencing, or will experience, financial difficulties, there are independent organisations that can provide free advice and support on your financial needs, such as Citizens Advice, National Debtline, Business Debtline and PayPlan.

 

Details of how you can contact these organisations and other sources of free advice can be found on the Money Advice Service website: www.moneyadviceservice.org.uk

 

More questions about Pay as you Grow?

 

Visit our Frequently Asked Questions to find further guidance and support

 

Get the right support during coronavirus

We understand these are difficult times, and if you're in need of a helping hand we're here to support you.

Find guidance and support on our coronavirus hub.

Visit the coronavirus hub

We’re here to help

You do not need to contact us in advance. We will send you a repayment schedule outlining your options, around three months before your first payment is due.

However if you’re worried about your finances, the quickest way to get in touch is via your Relationship Manager. If you don't have a Relationship Manager, please refer to your usual Bank contact.

If you are struggling with your finances, you can get free debt advice. 

We partner with PayPlan (a third party company), who can offer you free confidential advice for all of your debts. 

Start your journey with PayPlan

Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy.

British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.

Visit british-business-bank.co.uk.

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