Prime Minister Boris Johnson announced a four-week lockdown in England starting on November 5th in a bid to curb the spread of COVID-19. The new rules and restrictions, which will be imposed across England, will replace the previous “three-tier” system. What are the impacts SMEs across the country will face?
Whilst the lockdown is scheduled to end on the 5th December, ministers have warned that the lockdown could last longer than four weeks. Business leaders have called for financial help from the government to support them as the crisis looms as thousands of firms will be forced to shut down. However, the new Government lockdown does not have to spell the end for SME businesses. Instead, they should take full advantage of the Government’s latest coronavirus SME aid schemes. Most of the UK’s 5.9 million SME businesses and retailers will survive the coronavirus outbreak if they get to grips with the latest Government SME assistance packages quickly.
Here is a guide to the latest Government SME assistance and how your business can take advantage of them to survive lockdown 2.0:
CBILS:
The British Business Bank’s Coronavirus Business Interruption Loan Scheme (CBILS) which was due to end at the end of November has been extended till January 31st. The scheme is available for SMEs through more than 100 accredited lenders across the UK and to help navigate you through the various CBILS lenders, get in touch with Funding Bay who will can you the most suitable match.
The scheme will loan to any company if they are a UK Ltd company, who has traded for at least 12 months, and their last filed accounts show they are solvent and profitable. CBILS facilitates business loans to smaller businesses that are viable but unable to obtain finance due to having insufficient security to meet the lender’s normal requirements because of the Covid-19 crises. In this situation, CBILS provides the lender with a government-backed 80% guarantee against the outstanding facility balance.
The Government will 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. Get in touch with a member of the Funding Bay team to place your application for CBILS.
Retain Key workers, even if they are not essential right now:
The Coronavirus Job Retention Scheme (CJRS) enables employers to access grants, by the end of April at the latest, from the UK’s tax authority to allow them to keep paying staff. The government says 80% of gross wages in the private sector, up to £2,500 a month, for those not working and who would otherwise have been laid off, will be covered by these grants from HM Revenue and Customs. SMEs will need to designate affected employees as ‘furloughed workers,’ and notify their employees of this change.
Grant funding of up to £25,000:
Retail, hospitality, and leisure businesses with property with a rateable value between £15,000 and £51,000 will qualify for the Retail and Hospitality Grant Scheme. This provides businesses in the retail, hospitality, and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,000 and £51,000, they will receive a grant of £25,000. The local authority will write to all SMEs eligible for this grant shortly.
Outcome:
It is unclear what the future holds or how long the lockdown will truly go on. High street businesses will be faced with a major blow as more firms will be left struggling to make ends meet. However, whilst this lockdown is an economic burden for all, we can expect that those businesses that make use of the help on offer from the Government will be in a significantly healthier position next year than those who don’t.
