The COVID-19 outbreak means businesses in the UK – and, indeed, many more companies worldwide – are facing arguably their most important test yet.
If you’re the owner of a business that was struggling with debts beforehand, you’d be forgiven for thinking the best solution is to throw in the towel.
It’s certainly not an easy decision, but it can sometimes be better to cut your losses instead of pumping more time and money into a failing business.
The quicker you acknowledge potential problems, the better chance you can do something about them before it’s too late.
The truth is, though the actual economic impact is still uncertain, there is more support available to businesses now than before the virus started to spread.
In March, Chancellor Rishi Sunak outlined a package of emergency measures to support public services, people, and businesses.
These include the Coronavirus Job Retention Scheme and the Coronavirus Business Interruption Loan Scheme – details of which you can find below.
There are several other schemes and packages designed to help businesses:
- Deferring VAT and Self-Assessment payments
- Self-employment Income Support Scheme
- Statutory Sick Pay relief package for small- and medium-sized businesses (SMEs)
- 12-month business rates holiday for all retail, hospitality, leisure, and nursery businesses in England
- Small business grant funding of £10,000 for all companies 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
- A new lending facility from the Bank of England to help support liquidity among larger firms
- The HMRC Time To Pay Scheme
What is the Coronavirus Business Interruption Loan Scheme, and is it a good option for me?
If your business needs short-term cash flow support, then you may be eligible for the new Coronavirus Business Interruption Loan Scheme.
Delivered by the British Business Bank, it enables companies to apply for a loan of up to £5m, with the UK Government covering up to 80% of any losses with no fees. In addition, the lender can provide finance in the form of term loans, overdrafts, invoice finance, and asset finance.
Businesses can access the first 12 months of that finance interest-free, as the Government will cover the interest payments during that period.
Changes to the scheme mean that even more small UK businesses impacted by the coronavirus crisis can access the funding they require.
More importantly, access has been opened up to smaller businesses that would previously have met requirements for a commercial facility but wouldn’t have been eligible.
This has significantly increased the number of businesses eligible for the scheme, which is now operational with lenders as of Monday, 6 April.
What is the Coronavirus Job Retention Scheme, and how will it benefit my business?
The Coronavirus Job Retention Scheme allows furloughed workers to receive 80% of their wage for all employment costs up to a cap of £2,500 per calendar month, including tax, NICs, and pension.
Once an employee has been designated as furloughed and agreed upon between relevant parties, the employer should inform HMRC.
The scheme is open to all UK employers who created and started a PAYE payroll scheme on 28 February 2020.
If you would like more information about how your business can benefit from these schemes, please contact the Future Strategy team today to find out more.