Source · Select Committees · Treasury Committee
Recommendation 11
11
Paragraph: 100
It remains unclear how the Government expects businesses to pay back loans in the future.
Conclusion
It remains unclear how the Government expects businesses to pay back loans in the future. The crisis and the lockdown of the economy meant that businesses have largely forgone revenue which many are unlikely to make up in the future and revenue is also likely to be suppressed in some sectors for some time.
Paragraph Reference:
100
Government Response
Acknowledged
HM Government
Acknowledged
Even prior to the extension, over 1 million businesses had been supported by the Bounce Back Loan Scheme, many of which have not previously taken out finance. The government has always been clear that these are loans, not grants, but it has also given businesses flexibility in repaying them, by extending the repayment terms to 10 years under the Pay as you Grow initiative, reducing the monthly repayments by almost a half. Under this scheme, we have also given businesses the option to move temporarily to interest-only payments for a six- month period or to pause their payments entirely for six months. For those who choose to use their Pay as you Grow options, the government will ensure their credit files are not adversely impacted.