The easing of lockdown has provided many businesses with a lifeline. People are returning to their business premises, contracts have resumed and new commissions are being received. However, it will be some time before many businesses stabilise their cash flow, with some predictions for recovery appearing bleak.
There are businesses which still require financial assistance, and business support and funding options are still available. However, whilst closing dates for financial support schemes relevant to the pandemic are looming, there is still time to access support.
In this article we examine the various business support and funding options that the Government made available during the pandemic, and provide you with an update of what’s still available, and how long for.
Types of Business Funding and Business Support
The following support is still available from the government. The last update was provided on 9th July 2020.
You can claim for wages through the Coronavirus Job Retention Scheme.
Furloughed workers across the UK will continue to receive 80% of their current salary, up to £2,500. However, this will decrease from August.
- August – the government will pay 80% of wages up to a cap of £2,500. Employers must pay NI and pension contributions.
- September – the government pays 70% of wages up to a cap of £2,187.50. Employers must pay NI and pension contributions. Employers are also responsible for topping up employees’ wages. This is to ensure they receive 80% of their salary up to a cap of £2,500.
- October – the government pays 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Again employers must pay NI and pension contributions and are responsible for topping up employees’ wages to ensure they receive 80% of their salary up to a cap of £2,500.
The Coronavirus Job Retention Scheme will cease completely at the end of October 2020.
Although the option to defer payment on VAT ended in June you can still apply to defer a self-assessment payment due to the Coronavirus.
If you are a self-employed individual or a member of a partnership, and your business has been adversely affected on or after 14th July 2020, you can submit a claim.
This is the second and final grant available for this scheme and you must claim on or before 19th October 2020.
There is still a business rates holiday available for retail, hospitality and leisure businesses. The relief applies to business rate bills due in the 2020-2021 tax year and is currently offered for this year alone.
Additionally business rates will not be re-valued until 2022. The Communities Secretary Rt Hon Robert Jenrick MP commented that:
‘We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation and have acted to end that uncertainty by postponing the change.’
There are a variety of funds available from local authorities across all sectors. Small businesses in England which pay little or no business rates are entitled to a one-off cash grant of £10,000 from their local council. There is no information regarding the closure of this scheme at present.
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses affected by COVID-19 and is still available.
The maximum length of the loan depends on the type of finance you apply for.
It is typically a maximum 3 years for overdrafts and invoice finance facilities and 6 years for loans and asset finance facilities.
This scheme issues convertible loans between £125,000 to £5 million and is open for applications until the end of September 2020.
The Bounce Back Loan Scheme (BBLS) enables rapid access to finance for small and medium sized businesses. Eligible businesses may borrow between £2,000 and up to 25% of their turnover up to a maximum of £50,000. The current closing date for applications is the end of September 2020.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) offers funding to larger businesses affected by COVID-19. Large businesses can access finance up to the amount of £200 million and the finance is available for 3 months to a maximum 3 years.
There is no information relating to the closing of applications for this loan scheme however, we will monitor the situation and update you accordingly in due course.
Additionally large businesses are entitled to apply for the COVID-19 Corporate Financing Facility. This relates to the Bank of England buying short-term debt from large companies allowing them to finance short-term liabilities. The scheme is available for at least 12 months.
The Final Word
For many businesses the pandemic has been the biggest challenge they have ever faced. Government support has offered a variety of options to provide business support and funding options to all businesses struggling during the last months.
However, Government support specific to COVID-19 will begin to wind down during the autumn. So if you think your business would benefit from some financial help during this time, don’t delay.
And if you would like to talk to us in more detail about your funding options, please don’t hesitate to get in touch. We are always happy to help you find the best possible funding solution for your business.