’Pay as you grow’ will enable those with Bounce Back loans to extend their repayment from six to 10 years, nearly halving the average monthly repayment.

Businesses that are struggling can choose to make interest only payments, and those "in real trouble" can apply to suspend repayments for up to six months.

Their credit rating will not be affected. 

The Treasury is also changing the terms of other loan schemes. 

For Coronavirus Business Interruption loans, the government is extending the government guarantee for up to 10 years, making it easier for lenders to give more people more time to repay. 

"We are also extending the deadline of all our loan schemes to the end of this year and starting work on a new successor loan guarantee programme set to begin in January," said Sunak.  

Sunak will also give businesses more time and flexibility over their deferred tax bills.

"I will allow businesses to spread that VAT bill over 11 smaller repayments with no interest to pay," he said. 

"Any of the millions of self-assessed income tax payers can also extend their tax bill over 12 months from January."

Sunak mentioned  hospitality and tourism as "two of the most affected" sectors.

Under current plans VAT for these sectors will increase from a reduced 5% back to 20% in January. The government is cancelling the planned increase in VAT and will keep the lower 5% VAT rate until 31 March.