Bounce Back Loans Update
Many farming businesses availed of the Government Bounce Back Loan scheme in the last 12 months. The end of the first anniversary is happening about now and your lender is asking whether you want to extend the repayments from 5 to 9 years.
If you do not reply, it will default to the remaining 5 year repayment. By extending to 9 years , you get an extra 4 years at 2.5% fixed with option of repaying at anytime in the 9 year period without a penalty.
If your business borrows money continually, then this is cheap low risk money. I have been reassured by the banks that extending the repayment doesn’t affect your credit rating.
Everyone’s financial situation is different and each business needs to look at the option that best suits their cashflow and financial needs. In general extending this is an opportunity to extend borrowings and free up cash shorter term to invest in something that will give you better than 2.5% return without any banking fees! HP rates on machinery over similar periods will be double this rate fixed with set up fees and early repayment penalties.
Be aware and don’t let this opportunity pass before the repayment anniversary. Contact your bank or Gerard at email@example.com or Tel 07976 426420 to discuss your cashflow.