The Covid-19 pandemic has had an incredible impact on the UK economy, plunging the nation into a sharp recession, producing a significant increase in unemployment and affecting a large range of businesses of all types and sizes.
In order to mitigate the financial effects of the pandemic, Her Majesty’s Government has taken several actions to provide relief and assistance to both small and large businesses.
According to Business Adviser and Corporate Consultant Neil Debenham, small and medium-sized businesses that have been affected by the ongoing Covid-19 pandemic have a range of support options that are available, including loans, tax relief and cash grants.
Neil Debenham, who specialises in business financing and recovery strategies provides more information on the options for coronavirus-affected businesses below.
For businesses with employees
Businesses that have been affected by the Covid-19 pandemic, retaining employees has often been a significant challenge. If you’ve had to furlough employees, relief may be available under the Coronavirus Job Retention Scheme.
The Coronavirus Job Retention Scheme was recently extended until the 31st of March, 2021 to provide additional relief to affected businesses. Under the scheme, businesses with employees who’ve been furloughed can apply for a grant for part of their typical monthly wages.
For small and medium-sized businesses
Small and medium-sized businesses are eligible for several special forms of relief and support during the Covid-19 pandemic explains Neil Debenham.
One form of support is the Coronavirus Business Interruption Loan Scheme (CBILS), which is a financing scheme for small and medium-sized businesses.
Under the scheme, businesses that qualify can access financing of up to £5 million, with 80 per cent of the finance guaranteed by the government and fees and interest paid during the first 12 months of the loan term.
Currently, the scheme is available for UK-based small and medium-sized businesses that have an annual turnover of less than £45 million. You will need to prove that your business has been affected by the Covid-19 pandemic and would otherwise have been financially viable.
Another form of financial relief for small and medium-sized businesses is the Bounce Back Loan Scheme (BBLS). This scheme allows small and medium-sized UK businesses to borrow £2,000 to 25 per cent of their total turnover, with a maximum loan value of £50,000.
Via the scheme, 100 per cent of the loan value is guaranteed by the government, with fees and interest waived for the first 12 months. After 12 months have passed, interest is applied at a rate of 2.5 per cent per annum.
Some small businesses may be eligible for relief if they have been affected by public restrictions to stop the spread of the pandemic. The latest form of support is the Local Restrictions Support Grant, which is eligible for businesses forced to close in November and December.
Finally, small and medium-sized businesses can make use of the Future Fund — a government loan scheme for UK-based companies that provides financing of £125,000 to £5 million, subject to matching financing from private investors.
The scheme is available for businesses based in the UK that have raised more than £250,000 from investors and do not trade shares on a regulated market. Eligible companies must have at least half of their staff in the UK and derive more than half of revenues from UK sources.
For large businesses
Two forms of support are available for large businesses that have been affected by the Covid-19 pandemic. The first is the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the second is the Covid-19 Corporate Financing Facility.
Under the Coronavirus Large Business Interruption Loan Scheme, medium and large-sized UK businesses can access financing with a value of up to £200 million, with 80 per cent of the loan guaranteed by the government.
Under the COVID-19 Corporate Financing Facility, large companies can sell debt to the Bank of England in order to provide support to companies that have been affected by short-term finance issues and interruptions to cash flow.
For self-employed individuals
Self-employed business owners, as well as members of partnerships, may be able to receive a grant under the Self-Employment Income Support Scheme. A variety of grants are available for businesses that have seen a reduction in profits due to the Covid-19 pandemic.
Closing thoughts
The Covid-19 pandemic has caused unprecedented damage to the economy, with many small and medium-sized businesses bearing the brunt of the impact. As such, if you’re eligible, it’s a good idea to make use of financing and relief schemes to keep your business afloat.
A variety of options are available depending on the size and type of your business. If you’re not sure of where to begin, consider speaking to an expert to learn more about the support options that are available to you.
Neil Debenham www.neildebenham.com
