The government has introduced various forms of financial assistance to businesses in response to the global Covid-19 pandemic. Due to the number of different guidance available on the government website, this summary will hopefully assist in providing a quick overview on the available schemes and the applicable criteria.
1. Business Loans:
The government released an online toolkit to help businesses evaluate what assistance they may qualify for. A link to the toolkit can be found here.
The following loans are available to businesses: –
1.1 CBILS – Coronavirus Business Interruption Loan Scheme:
- Small and medium size businesses (SMEs) can apply for interest free loans, overdrafts, invoice finance and asset finance via 40+ accredited lenders.
- Maximum facility of £5m, repayment terms of up to 6 years;
- No personal guarantees required for facilities below £250,000;
- The government will make a Business Interruption Payment to cover any interest for 12 months and any additional fees imposed by lenders; and
- The government will provide accredited lenders with a guarantee of 80% on each loan free of charge.
- UK based SMEs with up to £45m annual turnover adversely impacted by Covid-19;
- Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic; and
- Not classed as a “business in difficulty” on 31 December 2019, (if applying for +£30K).
1.2 CLBILS – Coronavirus Large Business Interruption Loan Scheme:
- UK based mid-sized and large businesses (+£45m annual turnover) can apply for term loans, revolving credit facilities, invoice finance and asset finance via 10 accredited lenders;
- The government will provide a guarantee of 80% on each loan of up to £25 million;
- Businesses with +£45m turnover can apply for a maximum facility of £25m;
- Businesses with +£250m turnover can apply for a maximum facility of £50m; and
- The previous upper threshold of £500m annual turnover has been removed.
1.3 Future Fund:
- To be launched in May 2020. Designed to assist innovative UK based private companies which are facing financing difficulties due to the Covid-19 outbreak;
- The government will provide loans ranging from £125,000 to £5 million, subject to at least equal match funding from private investors;
- The business must have raised at least £250,000 in equity investment from private investors over the last 5 years; and
- If the business is part of a group of companies, only the ultimate parent company may receive funding.
1.4 BBLS – Coronavirus Bounce Back Loan Scheme:
- SMEs can apply to borrow between £2,000 and £50,000;
- The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months and the government will work with lenders to agree a low rate of interest for the remaining period of the loan; and
- Repayment terms of up to 6 years.
- UK based SMEs adversely impacted by Covid-19;
- The business was “not a business in difficulty” at 31 December 2019;
- Engaged in trading or commercial activity in the UK and was established by 1 March 2020;
- Not using the CBILS, CLBILS, or CCFF schemes; and
- Is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
2. Tax payments:
VAT registered businesses with a VAT payment due between 20 March 2020 and 30 June 2020 may defer payment until 31 March 2021.
Companies unable to pay a tax bill may also be able to delay payment without incurring additional liabilities via HMRC’s online service.
3. Real estate:
3.1 SBGF – Small Business Grant Fund:
- Businesses with a property that was eligible (as at 11 March 2020) for either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR)will be eligible for a payment of £10,000.
3.2 RHLG – Retail, Hospitality and Leisure Grant:
- Properties which had (as at 11 March 2020) a rateable value of less than £51,000 and would have been eligible for a discount under the business rates Expanded Retail Discount Scheme are eligible for the grant; and
- Eligible businesses will receive £10,000 per property if the property has a rateable value of up to £15,000 or £25,000 per property if the property has a rateable value greater than £15,000 but less than £51,000.
The government’s guidance on the above two real estate schemes can be found here.
3.3 Protection from aggressive rent collection:
High street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic.
Statutory demands and winding up petitions issued to commercial tenants to be temporarily voided and changes to be made to the use of Commercial Rent Arrears Recovery, building on measures already introduced in the Coronavirus Act.
A 90 day stay of possession proceedings commenced on 27 March 2020 including possession claims following expiry of a lease and mortgage possession proceedings.
Should your business needs any assistance to determine whether it may qualify for any of the above schemes, or should you need further clarification, please do not hesitate to get in touch with a member of our corporate team.