COVID-19: What Financial Supports are Available to UK Businesses?

COVID-19: What Financial Supports are Available to UK Businesses?

7
minute read
COVID-19

In the recent budget, U.K. Chancellor Rishi Sunak announced a number of initiatives to support business due to the impact of Coronavirus.

This was then bolstered by the announcement of a £330bn COVID-19 financial package, designed specifically to aid businesses during this crisis. Businesses now have access to a number of grants and loans to enable businesses to continue running. 

Disclaimer: Occupop is not a governing body or financial institution, this information has been collated from gov.uk, HMRC and various financial experts as at date of publication and is subject to change. Any information provided here is intended to inform rather than advise.

Additional financial support available to help businesses during COVID-19

We have summarised the supports that are now available to businesses during the Coronavirus pandemic. Certain aids listed below are available U.K. wide and certain supports are applicable to England only. Links to additional supports for Scotland, Wales and Northern Ireland are listed at the end of this article. The main schemes are: 

  • A Business Interruption Loan Scheme was introduced as part of the £330bn package to support SMEs*. This is a temporary scheme which gives SMEs access to loans, overdrafts, invoice finance and asset finance of up to £5 million with a finance term of 6 years for loans and asset finance, with a 3 year term for overdrafts and invoice finance facilities. For the first 12 months there will be no upfront costs and lower initial repayments. The payments are made through commercial lenders, backed by the Government-owned British Business Bank. All 40 accredited lenders are listed here. To be eligible, your business must be based in the U.K. with a turnover of £45 million or less per year and your business must generate more than 50% of its turnover from trading activity. Applications are made directly with your lender. Full details of this scheme are available here.

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  • Small Business Grant Funding has been made available, allowing local authorities to give additional funding to small businesses impacted by Coronavirus. This is applicable to small businesses who are already supported by local authorities and pay little or not business rates due to rate relief i.e. small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. Businesses in England^ are eligible for this one-off grant of up £10,000 if you receive a rate relief after 11th March and your business has a physical premises. Your local authority should contact you if you are eligible for this grant or you can contact them directly with any queries, a local authority finder is available here
  • For larger companies, the Bank of England has introduced a COVID-19 Corporate Financing Facility (CCFF). This will allow the Bank of England to buy short term debt, known as commercial paper, from larger companies. This will provide a quick and cost-effective way to raise working capital for those large firms who need it. It is open to firms who can demonstrate financial stability prior to Coronavirus, and does not require them to have issued a commercial paper previously. The scheme will be in operation for at least 12 months, or as long as needed to relieve cash flow pressures on firms that make a material contribution to the UK economy. CCFF can be accessed by your bank. It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, UK Finance will provide a list of banks that are able to assist. Full details on this scheme can be found here. 
COVID-19: What financial supports are available to businesses?
  • In England^, a cash grant has been made available to retail, hospitality and leisure businesses. This is grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000. To be eligible for this grant, your property must be wholly or mainly being operated as: 
  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

Your rateable value must be below £51,000 to be eligible. Your local authority should contact you if you are eligible for this grant or you can contact them directly with any queries, a local authority finder is available here

  • Support for SMEs* paying Statutory Sick Pay (SSP) to employees due to COVID-19 has been made available. This is UK wide and is applicable to businesses that employ less than 250 employees as of 28th February 2020. This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of coronavirus. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. Should you as an employer require proof of isolation requirement, an employee can submit an isolation note (NHS111) online, which can be found here. This rebate is currently being developed with further information expected in the coming weeks. The Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

*SMEs, are defined as: Viable micro, small and medium sized enterprises (SMEs). SMEs are defined as enterprises that:

  • Have fewer than 250 employees
  • Have a turnover of £25 million or less
  • Gross assets of less than £12.5 million
  • Is established and operating in the U.K.

Source: https://ec.europa.eu/growth/smes/business-friendly-environment/sme-definition_en

^ There are some adjustments outside of England. For business support outside of England go to Scotland, Wales and Northern Ireland.

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Summary Points

Additional financial support available to help businesses during COVID-19

  • A Business Interruption Loan Scheme was introduced as part of the £330bn package to support SMEs. This is a temporary scheme which gives SMEs access to loans, overdrafts, invoice finance and asset finance of up to £5 million
  • Small Business Grant Funding has been made available, allowing local authorities to give additional funding to small businesses impacted by Coronavirus. This is applicable to small businesses who are already supported by local authorities and pay little or not business rates due to rate relief i.e. small business rate relief (SBRR), rural rate relief (RRR) and tapered relief.
  • For larger companies, the Bank of England has introduced a COVID-19 Corporate Financing Facility (CCFF). This will allow the Bank of England to buy short term debt, known as commercial paper, from larger companies.
  • In England, a cash grant has been made available to retail, hospitality and leisure businesses. This is grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.
  • Support for SMEs paying Statutory Sick Pay (SSP) to employees due to COVID-19 has been made available. This is UK wide and is applicable to businesses that employ less than 250 employees as of 28th February 2020.
  • There are some adjustments outside of England. For business support outside of England go to Scotland, Wales and Northern Ireland.
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