Businesses that took out COVID-19 loans will be given some “breathing space” to make their first repayment, Chancellor Rishi Sunak has announced.

The Treasury announced over 1.4 million firms who have taken out bounce-back loans will be able to pay it back over a ten-year period instead of six.

Borrowers also have the option to only pay the 2.5% interest on the loans or pause repayments altogether for six months, but only after six contributions have been made.

When the bounce-back loan scheme was launched, firms were allowed to borrow up to £50,000 to help them stay afloat during the pandemic.

Sunak said:

“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.”

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