Last night the Chancellor set out a package of temporary, timely and targeted measures to support businesses through this period of disruption caused by COVID-19.
Some of the measures unveiled in the budget recently have been extended due to the nature of the current pandemic and new measures have been added as follows:
- a statutory sick pay relief package for SMEs
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance up to £5M
- the HMRC Time To Pay Scheme
In this article I will concentrate on the coronavirus business support grants and loans most likely to apply to your small business, these are the small business grant funding and the Coronavirus Business Interruption Loan Scheme.
Support for businesses that pay little or no business rates
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.
If your business is eligible for SBRR or rural rate relief, you may want to make sure that your local authority is aware of your requirement, however, as yet there is no formal application process.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan or CBIL Scheme, delivered by the British Business Bank, will launch next week to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.
This scheme is an extension of the Enterprise Finance Guarantee scheme already operated by the British Business Bank. From past experience this scheme does not provide access to capital very quickly often taking months to complete so we at 4 Oceans Capital are in contact with the lenders in the hope that the government has managed to find a way to shorten the process, since the vast majority of small businesses are relying on cash flow to keep them afloat. The lenders we have already spoken to don’t actually know how the scheme is going to work as yet and don’t get told until Monday 23rd of March. In any event it is probably a good idea to get your application in now to be considered since we have already been informed that it could take as long as 12 weeks to process any loan under this scheme.
At 4 Oceans Capital Ltd we work with a panel of more than 70 lenders, both traditional banks and alternative finance providers. By using us to propose your deal with a single application process you are more likely to get the funding you need at the best commercial rates.
Contact us today or fill out our Coronavirus Business Interruption Loan application form online.
#coronavirus #COVID-19 #SMESupport
Leave a Reply