The rapid outbreak of the coronavirus has affected businesses in all industries, all over the world. With the UK firmly in lockdown and many businesses forced to close, business owners are faced with assessing how the pandemic may affect their finances, staff, customers, suppliers, as well as worrying about their own health.

On Friday 17th March, Rishi Sunak, the Chancellor of the Exchequer, announced the first set of measures to help businesses impacted by COVID-19. He has since announced further measures to support even more businesses, and provide support to the self-employed. In total, the Government has now pledged an unprecedented support package worth £350bn. 

These measures are designed to help companies manage cash flow during this difficult period through unlimited loans and guarantees. To help you get to grips with what support is available to your business, we’ve created a straightforward guide to accessing financial support to help keep your business trading throughout this crisis. 

Government Support

The Government is supporting businesses and their employees through a package of measures during this period of unprecedented disruption, we’ve outlined the key facts and information for each scheme, and where to apply.

Coronavirus Job Retention Scheme

What is it?

This scheme is designed to enable businesses to carry on paying a percentage of their workers’ salaries for those who are temporarily unable to work and would otherwise be made redundant as a result of the pandemic. 

  • It will cover 80% of the salaries of retained workers, up to £2,500 per month.
  • The scheme will cover employer national insurance and the minimum auto-enrolment pension scheme contributions employers pay on employees’ wages.
  • Available from 1st March until 31st May 2020 (this may be extended).

Who can access it?

  • All UK-wide employers with a PAYE scheme that was created and started on or before 28 February 2020 will be eligible including all businesses, organisations, and charities.
  • The scheme covers all full-time and part-time employees, employees on agency contracts, as well as employees on flexible on or zero-hour contracts. 
  • The employer must have a UK bank account.

How and when can I access it?

To access the scheme, you need to designate affected employees as ‘furloughed workers,’ and notify employees of this change. You then need to submit information about these employees and their earnings to HMRC. You can find out more information here.

 

Statutory Sick Pay (SSP) Relief

What is it?

An SSP relief package for businesses, whereby the Government will refund up to 2-weeks’ SSP per eligible employee.

Who can access it?

  • It’s available to all UK-based employers with less than 250 employees (as of 28 Feb 2020).
  • Employers will need to maintain sickness records, but a GP fit note will not need to be provided.

How and when can I access it?

A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed.

 

Coronavirus Business Interruption Loan Scheme

What is it?

The temporary Coronavirus Business Interruption Loan Scheme (CBILS) supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years. The scheme will be delivered through commercial lenders, backed by the British Business Bank.

The Government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

Who can access it?

  • Businesses must be UK-based in their business activity, with an annual turnover of no more than £45m.
  • Loans in the scheme are limited to a maximum of 25% of 2019 turnover or double the annual wage bill, whichever is greater.
  • Businesses must have a borrowing proposal which, under normal circumstances, would be considered viable by the lender, and will enable the business to trade through any short-medium term difficulty.
  • The lender will likely require a number of documents including (but not limited to); MI to end of year 2019, 2017-2018 & 2018-2019 accounts, assets & liabilities, details of latest payroll, three months latest business bank statements, and an explanation of how the funds will be used.

How and when can I access it?

Unlike the other schemes, this scheme will be delivered through a number of commercial lenders, backed by the Government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks, some of which are Fundaco lender partners. For more information on accessing CBILS, click here. 

 

Covid-19 Corporate Financing Facility (CCFF)

What is it?

If you’re a large business and you’ve been affected by a temporary funding squeeze, the COVID-19 Corporate Financing Facility is designed to help you finance your short-term liabilities. It works by the Bank of England buying short-term debt from big businesses. It will also support corporate finance markets overall and ease the supply of credit to all firms.

Who can access it?

  • Non-financial companies that make a material contribution to the UK economy are able to participate in the facility. 

More information on eligibility can be found on the Bank of England website.

How and when can I access it?

This scheme is now available for applications. In order to access the CCFF, you will need to contact your bank. It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, visit UK Finance for a list of banks that are able to assist. 

 

Small Business Grant Fund (SBGF)

What is it?

A one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. This is designed to support small businesses that pay little or no business rates due to small business rate relief (SBRR), rural rate relief (RRR) and tapered relief.

Who can access it?

  • Businesses based in England and occupy a property
  • Business that are receiving small business rate relief or rural rate relief as of 11 March

How and when can I access it?

Local authorities will be administering these grants, and the Government has stated local authorities will be contacting eligible businesses in due course. To find your Local Authority, use this search tool.

 

Retail, Leisure & Hospitality Cash Grants

What is it?

Cash grants for retail, hospitality and leisure businesses based in England, of up to a maximum value of £25,000 per property. The amount will be based on criteria such as sector and rateable business value, and businesses with a rateable value of £51,000 or over are not eligible for this scheme at all. 

Who can access it?

  • These grants are available to retail, hospitality and/or leisure sector businesses based in England.
  • The properties that will benefit from this relief must be wholly or mainly used as a shop, restaurant, cafe, drinking establishment, cinema or live music venue, for assembly and leisure or as a hotel, guest and boarding premises or self-catering accommodation.

How and when can I access it?

You don’t need to do anything. Your local authority will write to you if you are eligible for this grant.

 

Business Rate Holidays 

What is it?

The Government has announced a 12-month business rates holiday for all businesses in the retail, hospitality, and leisure sectors, as well as all nurseries, for the 2020-2021 tax year.

Who can access it?

  • Small businesses in the retail, hospitality and leisure sectors, with a rateable value of between £12K and £51K in England, will see their business rates relief go up from 33% to 100%, for one year.
  • Nurseries will automatically not pay any business rates for the 2020-2021 tax year. Your property will benefit if your business is on Ofsted’s Early Years Register and wholly or mainly use the property for the provision of the Early Years Foundation Stage.

How and when can I access it?

You don’t need to do anything. Local authorities will apply the business rates holiday to your bills. You can estimate the business rate charge using the business rates calculator.

 

Time to Pay 

What is it?

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. 

Who can access it?

  • Any business that pays tax to the UK Government and has outstanding tax liabilities
  • Arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

How and when can I access it?

This support is available now. If you’ve missed, or are worried about missing, your next tax payment due to coronavirus, contact HMRC. You can also call the HMRC helpline for advice on 0800 024 1222. For more information on late payments, check with HMRC.

 

VAT Deferments

What is it?

The government has pledged to support businesses by deferring Valued Added Tax (VAT) payments due between 20 March 2020 and 30 June 2020. Businesses will have until the end of the financial year to make up for deferred VAT payments.

Who can access it?

  • All VAT-registered UK businesses.

How and when can I access it?

This is an automatic offer, and therefore businesses will not need to make VAT payments normally due with VAT returns during this period. 

Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

IMPORTANT: HMRC has confirmed they will not automatically cancel the collection of VAT payments by direct debit. Businesses who normally pay by direct debit should cancel their direct debit via their bank, and then reinstate it once the deferral is over.

 

Self-employment Income Support Scheme (SEISS)

What is it?

The Self-employment Income Support Scheme (SEISS) will support self-employed individuals whose income has been negatively impacted by COVID-19. The scheme will provide a grant of worth 80% of their profits up to a cap of £2,500 per month.

Who can access it?

  • Available to all self-employed people, including members of a partnership;
  • Have lost trading profits due to COVID-19;
  • File a tax return for 2018-19 as self-employed or a member of a trading partnership. (those who have not yet filed for 2018-19 will have until 23rd April to do so);
  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
  • Have trading profits of less than £50,000 and more than half of your total income come from self-employment.

How and when can I access it?

Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account.

It will be open for an initial three months with people able to make their first claim by the beginning of June. In the interim, the self-employed will still be eligible for other government support including more generous universal credit and business continuity loans.

 

We’re here to help

We appreciate the urgency of the situation and are here to help.

A number of our lending partners are part of the Coronavirus Business Interruption Loan Scheme (CBILS), so please feel free to get in touch to find out more about how we can assist, or for an in-depth guide to all things CBILS, head over to our dedicated CBILS article

We also have a variety of lenders who are not on the scheme but are able to provide support to businesses throughout this time. We have seen some changes to credit, risk and business sector appetite by a few lenders, however, many lenders have very publicly reiterated their support for small businesses during this challenging time.

We have no doubt that further changes will be made to lending criteria as more details emerge, but we’re keeping communication open with all of our lenders and will be well informed to deal with any business finance requests throughout this time. So, if you would like to explore the options available, such as working capital or bridging finance, we’d love to hear from you. 

Lastly, we’re received a number of queries about personal guarantees recently. These are commonly requested in business finance, so please rest assured that requests for personal guarantees are absolutely normal – and not something that has arisen because of the current situation.

 

We’ll be updating this page regularly with information about the financial support available to your business. However, as the Government’s advice on coronavirus is changing all the time, please continue to check gov.uk, the Scottish Government, The Welsh Government and the Northern Ireland Executive for the latest advice.