Can my business pay back a loan early?

You’re able to pay back any Funding Circle loan early, however there are some differences depending on the type of loan you have.

For businesses that have taken out a Coronavirus Business Interruption Loan Scheme (CBILS) loan, you can repay in full at any time after the first four months with no early repayment fee.

For businesses that have taken out a Funding Circle business loan, Government Recovery Loan Scheme (RLS) or Bounce Back Loan Scheme (BBLS) loan, you’re able to repay your loan in full at any time without incurring any early repayment fees.

For businesses that have taken out a Coronavirus Business Interruption Loan Scheme (CBILS) loan, you can repay in full at any time after the first four months with no early repayment fee.

There are also some further conditions for both BBLS and CBILS early repayment.

If you repay your BBLS or CBILS loan after the first 12 months, you must pay the interest due until the next repayment date. Please note, under clause 4.1 of the BBLS and CBILS Loan Conditions, if a loan is repaid fewer than eight days before the next scheduled repayment date, you will need to pay interest up to the subsequent scheduled repayment date (and so will incur a further month’s interest).

Please also note, the loan amortises over the course of the loan, as demonstrated in the examples below:

• CBILS: If you took out a £55,000 loan for 36 months with an interest rate of 6% the total you would have to repay over that 36 month period would be £58,503. If after 12 months you wanted to repay the loan you would only pay back £55,000 (as you don't pay any interest for the first 12 months),  saving you £3,503. If after 24 months you wanted to repay the loan you would pay back only £57,574 saving you £929.
• BBLS: If you took out a £25,000 loan for 72 months with its fixed interest rate of 2.5%, the total you would have to repay over that 72 month period would be £26,621. If after 12 months, you wanted to repay the loan, you’d only pay back £25,000 (as you don’t pay any interest for the first 12 months), saving you £1,621. If after 24 months you wanted to repay the loan, you would then pay back only £25,571 — a saving of £1,050. At 36 months, this would become £26,021 and you’d save £600 and if you paid back in 48 months, you’d pay £26,349 and save £272. Finally, at 60 months, you’d pay back £26,550 and save £71.