COVID-19 support for businesses
The UK government has published a summary of the package of measures to support business through the disruption caused by Covid-19.
- a coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England (for Scotland see below)
- 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 (for Scotland see below)
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme.
The Scottish Government and local authorities have additional information. This includes funding sources to support businesses in Scotland facing coronavirus on their business support finder with direct links to local authorities to apply for grants.
Changes have been made to business rates in Scotland for 2020-2021 along with extra rates relief:
- a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
- all non-domestic properties in Scotland will get a 1.6% rates relief.
Businesses in Scotland can apply to the Business Support Fund for a one-off £10,000 grant to help them deal with the impact of the outbreak (£25,000 is available to retail, hospitality and leisure business ratepayers with a rateable value between £18,001 and £50,999). Grants only apply to those businesses eligible for the small business bonus scheme or receive rural rates relief.
Bank of England - lending and liquidity
The Bank of England response to Covid-19 – what they are doing to support UK businesses and households at this difficult time.
In terms of funding, the Bank of England has taken steps to support banks’ capacity to lend. The BoE measures include a term funding scheme for banks so that they have a cost-effective source of funding to support additional lending to the real economy. There has also been a reduction in some capital requirements for banks to support further their ability to supply the credit needed.
These measures are supported by two other schemes:
Larger firms financing facility
For larger firms the Covid Corporate Financing Facility is operated by the Bank of England. To access the CCFF firms do not need previously issued commercial paper or currently have a credit rating, but do need to be of investment grade. The Bank of England explains what steps can be taken in order to participate. The Bank of England has published a dedicated webpage for corporates seeking to use the CCFF: participation in CCFF.
Smaller businesses loan scheme
The Coronavirus Business Interruption Loan Scheme: CBILS is for firms with turnover of up to £45m. It is being administered by the British Business Bank and is now available through participating accredited lenders.
This scheme can provide facilities of up to £5m for smaller businesses across the UK who are experiencing cashflow disruptions through lost or deferred revenues during the Covid-19 outbreak. Business finance products include term loans, overdrafts, invoice finance and asset finance facilities.
The scheme provides the lender with a government-backed 80% guarantee against the outstanding facility balance, subject to an overall cap per lender. This potentially enables an approved credit decision from a lender. There is no guarantee fee for SMEs to access the scheme. Interest and fees are paid by the Government for 12 months.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
The scheme may be used for unsecured lending for facilities of £250,000 and under (at the discretion of the lender). For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS.
The borrower always remains 100% liable for the debt.
For additional sources of information please check ICAS online coronavirus: information and resources for members.
If you wish to feedback to us on the schemes or how things are progressing for your business please email us.