Bounce Back Loan (BBL) Repayment Calculator — Outstanding Balance & PAYG

The Bounce Back Loan Scheme (BBLS) provided COVID-19 support loans of up to £50,000 (or 25% of annual turnover) to UK small businesses in 2020. Over 1.5 million businesses borrowed a total of £47 billion. The government guaranteed 100% of the loan and paid the first 12 months' interest at 2.5%.

Repayments started after the 12-month government-paid interest period — so for most businesses who took loans in May-June 2020, repayments began around May-June 2021. The standard term is 6 years from drawdown date.

PAYG gives BBL borrowers three flexible options: (1) Extend the loan from 6 to 10 years — roughly halving monthly payments, (2) Make interest-only payments for 6 months (usable up to 3 times), (3) Pause all payments for 6 months (usable once). These options can be combined and used at any time.

Yes. There are no early repayment charges on Bounce Back Loans. You can make overpayments or repay in full at any time without penalty. This is particularly beneficial if you're paying 2.5% on a BBL while holding cash earning higher savings rates.

BBLs have a government guarantee — but this protects the lender, not the borrower. If you can't repay, the bank can use standard debt recovery procedures. However, the government required lenders not to take personal assets, business assets, or personal guarantees for BBL recovery (unlike CBILS). Contact your bank early to discuss PAYG options.

No. The Bounce Back Loan interest rate is fixed at 2.5% per annum for the life of the loan. This is significantly below current market rates, making early repayment potentially less beneficial compared to other debts.

The Bounce Back Loan Scheme (BBLS) was for businesses needing up to £50,000, with 100% government guarantee and no personal guarantees. CBILS (Coronavirus Business Interruption Loan Scheme) was for larger loans up to £5 million, with 80% government guarantee. CBILS has different repayment terms.

No. The Bounce Back Loan Scheme closed to new applications in March 2021. If you already have a BBL, you can still use the Pay As You Grow options. No new BBLs can be applied for.

BBLs were made to businesses (not individuals), so they don't typically appear on personal credit files. However, if the business defaults and the lender takes action, this could affect the director's personal credit depending on circumstances.

If your company has been dissolved, the loan liability technically disappears with the company (as the government guarantee covers the lender). However, HMRC and the Insolvency Service are actively investigating BBL fraud and cases where directors took loans and then dissolved companies — this can result in personal prosecution.

The capital repayment of a BBL is not tax deductible — only the interest element is. The 2.5% annual interest on your outstanding balance is a deductible business expense. In the first year, the interest was paid by the government and is not your deduction.

Keep: original loan agreement, bank statements showing drawdown and repayments, records of how the funds were used (for HMRC compliance), any PAYG modification agreements, and all correspondence with your lender. These should be retained for at least 6 years.