If you are coming to the end of your second payment break and you do not have a Business Relationship Manager complete the online form ‘COVID-19 Credit Facilities options form’ and choose ‘I am coming to the end of my second payment break-option’ then choose from the options listed below.
There is some important information that you should be aware of before you decide which option suits your needs, more information on the options available to you as you come towards the end of your second payment break are available in our FAQs and below.
Option 1: Return to your previous level of capital and interest payments.
If you are satisfied that you will be able to return to making full capital and interest payments in order to pay your Credit Facilities and in line with what you would have been paying prior to taking your initial COVID-19 payment break, we encourage you to do that.
However, it is important to be aware that you will pay more in interest under Option 1 than you would under Option 3.
What does Option 1 mean for me?
As payments were not required during your initial and additional payment breaks it means that you will pay more interest over the extended term of your Credit Facilities than you would have if you had not taken any payment break and you will pay more under this option than if you choose to repay the Credit Facilities within the original term (Option 3 below).
Under Option 1, to pay off the Credit Facilities, you will now have to make payments for up to six months longer than the original term along with an extra payment to clear the interest that built up during the initial and additional payment breaks. For illustrative examples that show what this could mean for the total cost of credit on your Credit Facilities, please refer to the FAQs.
If you feel this is the best option for you and you chose option 1 to return to your previous level of full capital & interest payments at the end of your payment breaks and extend the term of your loan then you don’t need to do anything – except however if you are paying your credit facilities from a different bank, you will need to contact your paying bank to ensure that a standing order is set-up to repay your Bank of Ireland credit facility.
Option 2: 3 month payment moratorium with a 3 month term extension
If you would like a 3 month payment moratorium which will also include extending the term of your loan by 3 months prior to returning to full capital & interest payments then this option may be more suitable for you.
What does Option 2 mean for me?
By choosing this option it means that you are not required to make any payments to the Credit Facilities during the moratorium period (3 months), the term of your loan will be extended by 3 months and full capital and interest payments will recommence after the 3 month moratorium in line with what you would have been paying prior to taking your Covid-19 payment breaks.
As payments were not required during your initial and additional payment breaks or during this moratorium it means that you will pay more interest over the extended term of your Credit Facilities than you would have if you had not taken any payment break or moratorium and you will pay more under this option than if you choose to repay the Credit Facilities within the original term (Option 3 below) or if you’d chosen to repay the loan the loan under the extended term (Option 1 above). You could also pay less interest under certain short-term supports under Option 4 such as interest & part capital for up to 6 months.
Under Option 2, to pay off the Credit Facilities, you will now have to make payments for up to nine months longer than the original term along with an extra payment to clear the interest that built up during the initial and additional payment breaks and the moratorium.
Important: the moratorium request will be assessed for appropriateness by the Bank and applying for the moratorium option does not mean it will be granted.
Important: Please note if you avail of the 3 month moratorium under option 2 we will provide this moratorium as an alternative arrangement under the SME Regulations* and it will be recorded with the Central Credit Register and the Irish Credit Bureau which may impact your ability to access credit in the future.
Option 3: Increase your previous level of capital and interest payments so your credit facilities are repaid within the original term:
If you would like to clear your Credit Facilities within the original term instead of extending the term of the Credit Facilities, this option may be more suitable for you.
What does Option 3 mean for me?
By choosing this option, it means that your payments will recommence at an increased level upon expiry of your additional payment break, and it will result in a lower cost of credit than if you choose to extend the term of your credit facilities (i.e. Option 3 will result in a lower cost of credit to you than Options 1 & 2).
Important
However, by keeping the original term of the Credit Facilities, the payments to your Credit Facilities will be higher than you would have made prior to you availing of the initial and additional payment breaks. The reason for this is that interest that was applied over the period of the initial payment break and the additional payment break will have to be repaid within the original term of the Credit Facilities. For illustrative examples that show what this could mean for the total cost of credit on your Credit Facilities, please see the FAQs.
Option 4: Further financial support is required: You are concerned that you may experience on-going financial pressure due to financial difficulties and you would like to explore additional supports to help you to pay your Credit Facilities with either another form of short-term support or longer-term financial support.
What does Option 4 mean for me?
Option 4 may be most suitable for you if you are concerned that the impact on your finances of COVID-19 could be longer-lasting or that you may not be able to meet full capital and interest payments on your Credit Facilities after your additional payment break ends.
This option may also be a suitable for you if you can afford to make a level of payment immediately but you are not in a position to return to full capital and interest payments for a short period of time.
Important: all the supports available under this option will be assessed for appropriateness by the Bank and applying for any of these options does not mean they will be granted.
Important: Within option 4 there are three short-term options available to you and one long term support option where you can choose to explore additional supports that may be available to you.
The short-term options available to you are:
4 (i) Interest only up to 6 months.
4 (ii) Interest only plus part capital for up to 6 months.
4 (iii) Term extension.
The longer-term option available to you is:
4 (iv) You are concerned that you experience longer term financial pressure and you would like to explore additional supports to help pay your credit facilities.
What it means if you choose the option of interest only for up to 6 months: under this option you will only pay the interest portion of your monthly payments over the agreed term of the interest-only period. At the end of the interest-only period full capital and interest payments will recommence at a level sufficient to fully repay your loan within the remaining term. When full capital & interest repayments recommence they will be at a higher level than you had previously been paying due to the interest only period.
What it means if you choose the option of interest plus part capital for up to 6 months: under this option you will pay all the interest and a set agreed element of capital on your monthly payments over the agreed term of the interest and part capital period. At the end of the interest-only and part capital period full capital and interest payments will recommence at a level sufficient to fully repay your loan within the remaining term. When full capital & interest repayments recommence they will be at a higher level than you had previously been paying due to the interest plus part capital only period.
What it means if you choose the option of a term extension: under this option you will revert to full capital and interest payments at the end of your additional payment break and the term of your loan will be extended by the 6 month payment break period you received along with the agreed period of the term extension under this option. The capital and interest payments will recommence at a level sufficient to fully repay the loan within the remaining term (which will include the term extension period). As the term of your loan will be extended by the agreed term extension period with this option it will mean that your capital & interest payments will be at a lower amount throughout the term of your loan than if you had chosen not to extend your loan term.
What it means if you choose the option of – You are concerned that you experience longer term financial pressure and you would like to explore additional supports to help pay our Credit Facilities: If you choose this option it means that you feel that the other options outlined here on the Bank of Ireland website are not suitable for your current financial situation and you would like to explore additional supports that may be available to you.
Important: Please note if you avail of additional measures under option 4 we will provide the measures as alternative arrangements under the SME Regulations* and it will be recorded with the Central Credit Register and the Irish Credit Bureau which may impact your ability to access credit in the future.
* Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (as amended).
