Rishi Sunak introduced the Self-Employment Income Support Scheme (SEISS) in early 2020, in response to the UK lockdown. The scheme provides taxable grants to eligible self-employed people whose businesses have been affected by coronavirus. The Bounce Back Loan Scheme was also introduced to help keep companies afloat by providing business loans during this period of uncertainty. Both schemes are due to come to an end over the coming months.
What changes have been made to the loan scheme?
The Bounce Back Loan Scheme (BBLS) has provided a lifeline for many businesses over the last year.
The scheme has also financially assisted a number of self-employed people who were not eligible for SEISS.
Small and medium-sized businesses can benefit from the loans, which range from £2,000 to 25 percent of a businesses turnover – to a maximum of £50,000.
It was announced this week that the Chancellor has offered businesses more time to make their first repayment on Covid loans.
Changes have been introduced on Bounce Back Loans, such as allowing businesses to pay back their total loans over 10 years rather than six.
The changes implemented also allow people to pay back only the 2.5 percent interest on their loans.
Mr Sunak also announced last year that businesses could pause repayments altogether for half a year, but only after six contributions had been made.
But the Chancellor has now agreed to allow firms to opt for an additional six-month buffer before their first payment is due.
It means that, along with the initial 12-month interest and repayment holiday, loanees who were able to borrow a maximum of £50,000 will now have 18 months before they have to start paying back what they owe.
Mr Sunak said of the changes: “Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.
“That’s why we’re giving bounce back loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.”
Business Secretary Kwasi Kwarteng said: “While our vaccine rollout is moving at an incredible pace and the end is in sight, we know times are still tough for many companies and extra support is needed.
“These flexible repayment options will give businesses the time they need to recover from the pandemic before paying back loans, giving them the breathing space and confidence to build back better.”
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During this period of uncertainty, many businesses are hopeful support could be extended if restrictions remain in place past April.
However, the Government has not confirmed any changes to the current deadlines.
The Chancellor is expected to announce an update on the Government’s lockdown support packages in the Budget on March 3.
During his announcement, an update is expected on when the SEISS grant four applications will open and how much the grant will be worth.