Financial Assistance for Businesses

27th March 2020

We are in a fast moving and unprecedented situation which is putting significant strain on the majority of businesses and their employees.

Updated information on the COVID-19 pandemic and the UK’s response are provided on a daily basis from the Government and specialist organisations. 

As a result, this briefing is subject to any subsequent changes in Government advice, particularly in the event of any further restrictions on social distancing/isolation and lockdown.

This general briefing has been prepared to assist all of our business clients. It is not intended to represent financial advice but is intended to help businesses access information and resources that may assist them in these challenging times.

There are a variety of different measures and schemes available to businesses, not all of which are available to all.

This briefing deals with advice to businesses in the broader sense of the word.  

Sources of Support for Businesses

1) Coronavirus Business Interruption Loan Scheme
 
This is a loan scheme designed to support small and medium-sized businesses to access loans, overdrafts, invoice finance/factoring and asset finance.  

The loans are for up to £5 million, for up to six years.  

The scheme will be delivered through commercial lenders, backed by the Government-owned British Business Bank. All major banks are able to offer this scheme.  

The scheme is already open for applications and you should approach your own lender to apply. If your current lender is unable to assist, you may wish to approach other lenders.  

There are eligibility criteria which will apply. For the majority of businesses in the South West the main eligibility criteria is likely to be the ability to provide a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.    

2) Coronavirus Job Retention Scheme

All UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those who would otherwise have been laid off.  

This applies to employees who have been asked to stop working but who are being kept on the payroll, otherwise described as ‘furloughed workers’. Those furloughed employees will not be able to work in their current role during the period of furlough but will be retained as employees.  

HMRC will reimburse 80% of their wages, up to a cap of £2,500 per month, for 3 months initially.  

Businesses wishing to utilise this scheme will need to identify those employees who meet the criteria and then enter details on the Government portal. As at the date of this briefing note that portal has yet to be created.  

 3) Small Business Grant Funding

The Government is providing additional funding for Local Authorities to enable them to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) or tapered relief.  

This will provide a one-off grant of £10,000.  

Those small businesses entitled to access the scheme will not need to take any action.  

Local Authorities will write to businesses concerned.    

4) VAT Deferral

The Government will defer VAT payments for all businesses for the period from 20th March until 30th June 2020.

Businesses will not need to make a VAT payment at the end of March or at the end of June. 

No application is necessary.

However, customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay in good time in advance.

Taxpayers will be given until the end of the 2020/21 tax year to pay the back liability.      

5) Business Rates Holiday for Retail, Hospitality and Leisure

Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020-21 tax year.  

This will apply to businesses which operate:  

a.     as shops, restaurants, cafes, drinking establishments, cinemas and live music venues;
b.     for assembly and leisure; or
c.     as hotels, guest and boarding premises and self-catering accommodation.  

Businesses do not need to take action to access this support. Local authorities will apply the business rates holiday to bills.    

6) Cash Grants for Retail, Hospitality and Leisure

Cash grants of £10,000 or £25,000 will be available to businesses in these sectors depending on the rateable value of their property.   

Businesses do not need to take action, Their Local Authority will write to them if they are eligible for this grant.

 7)  Business Rate Holiday for Nurseries  

Children’s nurseries do not have to pay business rates for the 2020-21 tax year.    

8) General Finance Options  

A number of major high street banks are making funds available to small businesses affected by Covid- 19.  

Businesses may also access a range of finance through the Government-owned British Business Bank.    

9) Covid-19 Corporate Financing Facility

The Bank of England will buy short-term debt in the form of commercial paper from larger companies.  

This will support companies which are fundamentally strong but have been affected by a short-term funding squeeze. It will also support corporate finance markets and ease the supply of credit to all firms.  

Companies which make a material contribution to the UK economy can participate in the facility.   

In practice, businesses which meet the requirements would normally be UK incorporated companies or companies with significant employment in the UK. The Government will consider whether the company generates significant revenues in the UK or serves a large number of customers in the UK.     

Useful links  

For links to further useful information you may like to see:       

The Government’s main advice pages on Coronavirus Business Support which includes guidance on the various different sources of support outlined in this briefing

The Government’s Guidance to Employers and Businesses    

HOTSW Local Enterprise Partnership

Battens’ Business Services: Corporate and Commercial Services

Contacts

If you would like advice about any business issues, please contact:

  Katherine Gilmour on  01935 846059 or katherine.gilmour@battens.co.uk 

Brian Levine on 01935 846258 or brian.levine@battens.co.uk