Barclays top tips for businesses managing their debts
During the pandemic, many businesses have taken out new finance to help buoy their cashflows, however for some SMEs, this may be the first time they are managing business debt. We spoke to Hannah Bernard, head of Business Banking at Barclays, who provided her guidance and considerations for businesses at the start of their repayments.
- Flexible payment terms: Talk to your bank or lender about your repayment terms, as these may be flexible. For example, you may be able to negotiate a longer payment term to help spread out costs. If you are repaying a Bounce Back Loan, you may be eligible for Pay as You Grow (PAYG), allowing you to extend your term loan from 6 years to 10 years, temporarily reduce your monthly repayments to interest only, or even take a payment holiday for 6 months. Don’t leave it too late to choose your PAYG options though, as some lenders, including Barclays, will need you to give at least 20 days’ notice for the option to come into effect before your next payment.
- Monthly repayment amount: Once you’ve determined your repayment terms, you can work out your monthly repayment amount using online calculators by inputting the amount you’ve borrowed, the monthly interest, as well as the length of time over which you’re going to repay. Barclays have free standard online loan calculators, as well as calculators tailored for Bounce Back Loans.
- Identify any problems early: By assessing your cashflow and profitability, build a budget to identify any issues you may have with your repayment amounts early on. Don’t wait for things to get better and don’t be afraid to ask for help. Talk to your bank or lender promptly, share the challenges your business is facing and address it sooner rather than later.
- Support and resources: If you’re worried about your finances or repayments, you should contact your bank or lender as soon as possible. You may also be able to find some useful guidance on the Barclays money management hub. For further free advice, you can contact Business Debtline (chat online or call 0800 197 6026), National Debtline (for England, Scotland or Wales call 0808 808 4000), or Citizens Advice (online or visit the local Citizens Advice centre).