Covid-19 Update on Small Business Financial Assistance
Date: 20/03/20 | Author: Sean Toomer | 1 Comment
As the world seemingly desends into chaos, here's a quick update on what we know in terms of the assistance being offered to Small Businesses and when, and how they're likely to get it.
Business Rates Grants and Payment Holidays
All businesses in the retail, hospitality and leisure businesses will not have to pay business rates for the next 12 months. The criteria states you're eligible if your property is being used for Shops, Cafes, Restaurants, assembly and leisure and hotels. We expect more specific criteria to be announced in the next few days.
A £25,000 grant will be provided to the above businesses, where their business premises has a rateable value of between £15,000 and £51,000. If you're unsure of what your rateable value is, check your business rates bill. You would have received this in the last few weeks.
Those businesses that have a business premises but do not pay business rates (as they receive business rate relief), will receive a one-off grant of £10,000. Note, you will only receive this if you are the business rate payer. Those working in serviced offices are usually not the rate payer and therefore will not receive this. If you're unsure, check to see if you've received a business rates bill in the last few weeks. If you're responsible for the payment of rates, and receive the small business rate relief, you would have received a bill notifying you that nothing is due.
The Business Rates Grants are expected to be paid by the local authority and businesses do not need to do anything to receive this; your local authority will contact you. All local authorities are being given guidance by the government on this in early April, and we would expect these grants to be released shortly after this time.
Coronavirus Business Interruption Loan Scheme
Loans of up to £5m, backed 80% by the government for small businesses with a turnover of less than £41m per year. The list of accredited lenders is here. You apply to the scheme by talking to your bank, providing they are on the list. The scheme will be available from early next week commencing 23 March.
Support for paying tax
HMRC have set up a dedicated payment line if you're struggling to pay your tax bills. The number is 0800 0159 559. Simply call, and arrange a payment plan over a number of months.
Support for Employees
Not yet confirmed, but the Chancellor is expected to make an announcement today (Friday 20 March). We expect this to be along the lines of supporting small business in meeting their wages costs, with the possibility of a subsidy package which will cover the cost of 50% of employees wages bill, perhaps more. This is expected to almost certainly cover the hospitality industry.
What do to is the sh*t hits the fan
We released some top tips for small businesses struggling yesterday. You can read the full blog here. All points are still more than relevant now.
In addition, we'd also add the following tips for small business owners:
Do not sack your staff
I know it's difficult, particularly if you simply don't have the cash to pay them. But (hopefully), this isn't a forever-world-changing event, and you want to keep the staff you've got when things return to normal. The above lists packages available from the Government to help support you. If employees get paid, they will still buy things, still pay their bills, and all the cogs in the machine that is our economy keep moving. Do all you possibly can to pay your staff, even if it means not paying your rent or tax bills - the government are supporting you on these.
Get Funding in place, now
There is still easy ways to access finance. If you're a client and you need help on this, speak to us. The Flexi-Loan alternative offered by Iwoca is perfect. You can secure funding, but not use it unless you really have to. This can protect you should you need some reserves to dip into, until the government support comes in. We managed to secure funding for clients within less than 30 minutes, and there is no interest cost unless you draw on the funds. It's a much quicker, less expensive alternative to an overdraft.
Talk to me
I'm available at the office (by myself) or on my mobile which is 07725009300. If I don't answer, drop me an email on email@example.com. I'll do all I can for small businesses, client or not, to help you stay alive during this shitty time. I may not be able to save lives like the incredible nurses and doctors that are doing such a fantastic job, but I can make a small impact by giving sound great advice to a small business which saves only a few jobs, I'm happy to do all I can.
Hold off on paying tax bills if you need too
If you've got a large VAT or PAYE bill coming up, which could wipe out your reserves and mean you can't meet other payments. Don't pay it. Instead, call the dedicated number above for a payment plan. HMRC are being quite generous right now in agreeing payment plans over periods as long as 12 months, with no interest or penalties. This could mean the difference between paying staff and rent, and not.
Keep an eye out on our further blogs.
As soon as we know more and there are updates on the above, we'll let you know.
Sean & the Diverso Team
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