--- title: "Pay As You Grow: flexible loan repayment for SMEs" description: The ‘Pay As You Grow Scheme’ scheme announced by Rishi Sunak on Friday, allows Bounce Back Loan borrowers to have more flexibility in repaying their loans. image: https://blog.tomatopay.co.uk/hubfs/Imported_Blog_Media/bbl.png --- Pay As You Grow: flexible loan repayment for SMEs We use cookies to deliver our services. By using our website, you agree to the use of cookies as described in our [privacy policy](https://blog.tomatopay.co.uklegal/privacy_policy). 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Back in May 2020, business owners took out [Bounce Back Loans](https://blog.tomatopay.co.uk/the-coronavirus-bounce-back-loan-scheme-smes) of up to £50,0000, and repayments were initially due to start in May 2021. The Government had announced that it would cover the costs of interest for the first year of the loan, as well as not requiring any repayments for the first 12 months. The new ‘[Pay As You Grow Scheme](https://www.gov.uk/government/publications/winter-economy-plan/winter-economy-plan)’ announced by Rishi Sunak on Friday night, allows Bounce Back Loan borrowers to have more flexibility in repaying their loans. This allows the Treasury to provide small businesses with more time and flexibility in an attempt to save many businesses from closing their doors permanently.  The new support scheme will be available to over 1.4 million businesses who have taken loans out, adding to nearly [£45bn](https://www.altfi.com/article/7547_pay-as-you-grow-new-bounce-back-loan-repayment-options-for-15m-sme-borrowers) in total. # The Pay As You Grow Scheme at a glance:  1. Flexible repayment schedules tailored to your business needs. 2. Option to extend the loan from six to 10 years, which means that monthly payments are reduced by half with a fixed interest rate of 2.5%.  3. Make interest-only payments for six months, with the option to do so up to three times throughout the loan. 4. Pause repayments for up to six months once (this is now available from the first repayment, rather than the initial decided upon six repayment period). Those options can be used individually or combined with each other. The fourth option also allows businesses to start paying back their loans 18 months after they took them out.  All lenders are expected to offer the new options to the borrowers of the Bounce Back Loan Scheme, and are advised to directly inform their customers of the new information available to them.  Many claim that this new scheme has been introduced as a consequence of a recent report by the [National Audit Office](https://news.sky.com/story/covid-19-pay-as-you-grow-eases-business-burden-but-leaders-says-more-support-is-needed-12210150) stating that up to 60% of business loans would have defaulted because of the slow return to normality, [the decline of customers, and as a result lower revenue intake](https://www.ft.com/content/69c24157-c754-46d7-ba91-aea9f3f482b9). This scheme arrived at the right time. Many businesses are fearful of what April will bring as state-backed loans, job support schemes, including the furlough scheme, are deemed to end. We hope that the Chancellor will be extending those schemes throughout the summer to give small businesses the possibility to invest, recover and survive the current climate. --- Community has never been as important as it is today, and watching the business and sole trader community struggle throughout the past year has spurred us on to take a more community-led approach to our business. tomato pay is a simple, QR-code based payments and invoice app powered by Open Banking and built on our tomato pay API platform which offers both AIS and PIS capabilities. Businesses and sole traders can benefit from our low-cost QR-code payments solution with no hidden fees, which saves them money compared to their current payment systems, gives them instant access to their money as cash settlement happens almost immediately, and access to all of their bank accounts in one place. Businesses and sole traders can benefit from our quick and easy invoice solution. Invoices can be created within the app, with the option to give discounts and late penalties (pre-built into the app using gamification and behavioural science) and send nudges to remind customers and clients to pay. Plus, as you connect your bank account, payments are embedded within the app - so no need to give your bank details, and receive money owed instantly into your account. Everyone can support their local communities thrive by paying their neighbourhood businesses in a cashless, hassle-free way. ![Isabelle Weitz](https://blog.tomatopay.co.uk/hs-fs/hubfs/1dbe5c0f-19aa-4ed0-a151-50733ea0d40b.jpg?width=50&name=1dbe5c0f-19aa-4ed0-a151-50733ea0d40b.jpg) Isabelle Weitz Feb 8, 2021 12:00:00 PM ##### Continue reading [![tomato pay](https://blog.tomatopay.co.uk/hubfs/images/tp-footer-logo.svg)](https://www.tomatopay.co.uk) ##### Want all the latest news and updates from tomato pay? 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