What is Pay As You Grow?

The UK Government announced Pay As You Grow options for Bounce Back Loan borrowers, giving you flexibility and more time to pay back your Bounce Back Loan should you need it.

  • For the first 12 months of your Bounce Back Loan, no capital repayments are required and interest payments are covered by the UK Government’s Business Interruption Payment. After this period, we’ll collect repayments and charge interest.
  • If you’re worried about making your loan repayments, you can choose from a number of Pay As You Grow support options. You can select more than one option throughout the term of your loan.
  • You can select your Pay As You Grow options using Business Internet Banking before we take your first repayment. We will email you when your options are available to select.
  • Using these options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future.
  • If you decide to use any of the Pay As You Grow options, the overall cost of your loan will increase.
  • It is not possible to amend or cancel a Pay As You Grow selection once submitted.
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British Business Bank

As a confirmed accredited lender of the Bounce Back Loan scheme, we’re here to support our customers during the coronavirus outbreak.

If you require additional information about Pay As You Grow, please visit the British Business Bank website.

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Your Pay As You Grow options

The simplest way to view and select your Pay As You Grow options is by logging in to Business Internet Banking. 

Not registered for Business Internet Banking? Register now.

Log in and view options

Pay As You Grow options:

  • You can extend your 6-year Bounce Back Loan term to 10 years, at the same interest rate of 2.5%

    • May be suitable if you want to reduce your monthly repayments for the length of your loan.
    • You can request an extension at any time during the term of your loan.
    • You’ll pay back your loan at a slower rate, so the total amount you owe will go up and you’ll pay more interest over a longer term.
    • If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account things such as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
    • If you select this option and you want to use a repayment holiday at the same time, please allow 2-3 working days for this request to be processed first. You can then choose another option. 
  • You can choose to reduce your monthly repayments for 6 months by paying interest only.

    • May be suitable if you need short-term support, but expect to be in a better position to repay in the future.
    • You can switch to interest-only repayments up to 3 times during the term of your loan – this can be taken back-to-back (e.g. 18 consecutive months) or on 3 separate occasions.
    • By selecting this option, you can add 6 months to your loan term each time you switch to interest-only repayments, unless you’ve already extended your term to 10 years. 
    • Taking a capital repayment holiday will mean you are charged more interest and your loan will cost you more overall.
    • If you select this option, you’ll need to wait until the end of the 6-month period before you can use any other option.  
  • You can request a 6-month full repayment holiday (both capital and interest).

    • May be suitable if you need short-term support, but expect to be in a better position to repay in the future.
    • If you select this option, you will pause monthly repayments (both capital and interest) entirely for 6 consecutive months.
    • You can also choose to add 6 months to your loan term, unless you’ve already extended your term to 10 years.
    • Taking a full repayment holiday will mean you are charged more interest and your loan will cost you more overall.
    • Interest charged during your 6-month repayment holiday will be deferred for 6 months and spread out over the remaining term of your loan.
    • We’ll change your monthly payments at the end of the payment holiday and the amount you owe will go up. That’s because even though you don’t make payments during your repayment holiday, we will still add interest to your loan amount and interest will be charged at the same rate (2.5% (fixed) per annum).
    • You can use a full repayment holiday once during the term of your loan.
    • If you select this option, you will need to wait until the end of the 6-month period before you can use any other option. 
  • You can choose to extend the term of your loan to 10 years AND request either a 6-month capital repayment holiday OR a 6-month full repayment holiday before your first repayment is due.

    • May be suitable if you need short-term support and need to reduce your monthly repayments for the length of your loan.
    • Please make sure you have read information about each option before making your decision. 
    • This option will reduce your average monthly repayments, but the total amount you owe will increase and you’ll pay more interest over a longer term.
    • If you choose to combine options, you will need to select the 10 year term extension before requesting the 6-month repayment holiday via a separate submission. 
    • If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account things such as if you intend to cease trading or retire within the revised term of your Bounce Back Loan. 

Pay As You Grow calculator

Use our calculator to understand the impact each Pay As You Grow option has on your monthly repayments, and on the overall cost of your loan.

If you’re registered for Business Internet Banking, log in to view your options in more detail.

£

Option

First monthly repayment*

Monthly repayment 6 months later

Total loan term (months)

Total amount you will repay

Cost increase

Option

If you don’t use any Pay As You Grow options

First monthly repayment*

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Monthly repayment 6 months later

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Total loan term (months)

72

Total amount you will repay

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Cost increase

£0.00

Option

1. Term extension to 10 years

First monthly repayment*

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Monthly repayment 6 months later

##month191##

Total loan term (months)

120

Total amount you will repay

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Cost increase

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Option

2. Capital repayment holiday
(for 6 months)

First monthly repayment*

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Monthly repayment 6 months later

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Total loan term (months)

72More about this optionProviding you haven’t already extended your loan term to 10 years, you can choose to extend the term of your loan by 6 months. This will reduce your monthly repayments, but will increase the total amount you repay.

Total amount you will repay

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Cost increase

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Option

3. Full repayment holiday
(for 6 months)

First monthly repayment*

£0.00

Monthly repayment 6 months later

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Total loan term (months)

72More about this optionProviding you haven’t already extended your loan term to 10 years, you can choose to extend the term of your loan by 6 months. This will reduce your monthly repayments, but will increase the total amount you repay.

Total amount you will repay

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Cost increase

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  • Interest rate: 2.5% (fixed) per annum
  • Your capital repayment amount will be the same each month, but you’ll pay less interest each month as you repay the loan. If you select a Pay As You Grow option, your first new monthly repayment (or your first repayment after a repayment holiday ends) will be the highest, and repayments will reduce each month until the loan ends.
  • If you choose a Full Repayment Holiday we’ll change your monthly payments at the end of the payment holiday and the amount you owe will go up. That’s because even though you don’t make payments during your repayment holiday, we will still add interest to your loan amount and interest will be charged at the same rate (2.5% (fixed) per annum).
  • The amounts shown are indicative and could vary from your actual repayment amount.
  • This calculator assumes no repayments have been made and you have not already chosen any Pay As You Grow options

*Your first monthly repayment will be taken 13 months after you opened your loan. For the first 12 months of your loan, no capital repayments are required and interest payments are covered by the UK Government’s Business Interruption Payment.

**Interest-only monthly repayment amount (no capital repayments for 6 months).

Your Pay As You Grow options

The simplest way to view and select your Pay As You Grow options is by logging in to Business Internet Banking. 

Not registered for Business Internet Banking? Register now.

Log in and view options
  • Can I apply for multiple ‘Pay As You Grow’ options at a time?

    You can only request one ‘Pay As You Grow’ eligible option at a time, using Business Internet Banking.

    We advise you to wait at least four working days between submissions to ensure they are processed correctly.

    Remember, the Pay As You Grow options are available throughout the term of your loan. You can choose the repayment holiday options consecutively, or you can choose a Term Extension (to 10 years) alongside a repayment holiday. Simply choose the term extension first and request a repayment holiday separately.

    Register for Business Internet Banking if you haven’t already 


    Can I still select a ‘Pay As You Grow’ option if I have already topped up my Bounce Back Loan?

    Yes. If you have a Bounce Back Loan Top-Up, your original loan amount and Top-Up amount will be treated as one consolidated facility.


    Will I be warned before I return to repayments on my Bounce Back Loans?

    You will receive communications three, two and one month(s) before your first repayment is due.

    For example, if you had your loan on 4th June 2020, your first repayment will be due on 4th July 2021 and you will therefore receive your 3-month communication by 4th April 2021.

    You will be informed when and how you can make ‘Pay As You Grow’ selections in these communications.


    Can I cancel a ‘Pay As You Grow’ option if I change my mind?

    No, this will not be possible.

    However, if you subsequently decide you no longer require the support provided by the PAYG options, you can still reduce the interest you will pay by making full or lump sum repayments.

    More about making repayments


    Can I change the date repayments are taken from my account?

    No, unfortunately this is not possible as the date will be based on when you first opened your Bounce Back Loan.


    Do I have to be in financial difficulty in order to select a ‘Pay As You Grow’ option?

    No. Under ‘Pay As You Grow’, all borrowers – that is, any borrowers who request it, whether you are in (or approaching) financial difficulty and seeking forbearance or not – will be able to utilise the options.


    Can I only extend the term of my loan to 10 years?

    You can choose to extend the term of your loan to 10 years if required.

    There is no intermediate option for this term extension, you are only able to extend from 6 years to 10 years.

    If you haven’t already extended the term of your loan to 10 years, you can choose to extend your term by the same length of your Capital Repayment Holiday or Full Repayment Holiday (if selected).


    Will using the PAYG options affect my credit score?
    • Using these options won’t affect your credit score, or negatively affect your credit file.
    • We may use requests for Pay As You Grow options to help us assess affordability in future lending applications, for example we will take into consideration incomings and outgoings, including existing debt repayments such as the Bounce Back Loan, and also your total debt exposure, which will include the outstanding Bounce Back Loan.

    When is the latest I can select a Pay As You Grow option before my next repayment?

    You should allow at least two working days for your PAYG selection to take effect before your next repayment is due.

    If you want to select a PAYG option but your next monthly repayment is due within 2 working days, then you will need to make the monthly repayment in full before the option takes effect.

    We’ll automatically collect your repayments. Please ensure you have enough money available in your nominated account.

    If you still want to progress and select a PAYG option, the chosen option will take effect before the following month's repayment date.

  • Do you need to understand your options better?
    • If you feel like you’d prefer to talk to someone about these options, call us on 0345 602 5423 (+44 131 278 0177 from outside the UK). Lines are open Monday to Friday 9am to 5pm (excluding bank holidays).
    • If you have a hearing or speech impairment you can use Relay UK. Visit the Relay UK website for more information on their services.
    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, call us on 0345 602 5423 (+44 131 278 0177 from outside the UK). Lines are open Monday to Friday 9am to 5pm (excluding bank holidays).

    What are your other options?

    Debt Management Services are available to assist you with establishing a debt management plan through one of their advisors. Visit the Debt Management Service website for more information.

    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.

A 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.

Repaying your loan early

If you’re able to, you can pay back some or all of your loan early with no early repayment charges.

More about repaying early

Support with PAYG options

If you need to understand your options better, call us on 0345 602 5423 (+44 131 278 0177 from outside the UK). 

Lines are open Monday to Friday 9am to 5pm (excluding bank holidays).

Business Recovery

Businesses are facing unprecedented challenges right now and meeting financial obligations can be hard. Support is available should you need it.

Business Recovery Hub Business Recovery Hub

The Bounce Back Loan Scheme is not subject to the usual consumer protections that apply to business lending, and as such will not have the benefit of the protection and remedies that would otherwise be available under the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974.

The Bounce Back Loan Scheme is 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.

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.

Bank of Scotland plc Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 169628.

We adhere to The Standards of Lending Practice which are monitored and enforced by the LSB: www.lendingstandardsboard.org.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered. 

Lloyds Banking Group is a financial services group that incorporates a number of brands including Bank of Scotland. More information on Lloyds Banking Group can be found at lloydsbankinggroup.com.

This site is intended for UK residents unless otherwise stated.

© Bank of Scotland plc 2015. All rights reserved.

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances.  Specific advice should always be sought in each instance.