Financial Advice For Small Businesses During Lockdown

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It has been an economically troubling year for businesses. Footfall is down 75% compared to the same period in 2019; manufacturing, retail, and travel are facing wholesale changes and lots of small businesses are struggling immensely to keep the lights on as the Covid-19 pandemic continues.

However, there is light at the end of the tunnel. Government grants are being announced to help small businesses cope with the financial pressure. In addition, there is a plethora of advice out there for small business owners on how to manage the present challenges that the winter Covid-19 lockdown has brought. To help you and your business #staysafe, we have collated the latest financial help and opportunities for small businesses together below.

Government grants for Small Businesses during the lockdown

Rishi Sunak, the UK’s Chancellor, has recently announced new lockdown grants of up to £9000 (per establishment) to support retail, hospitality and leisure business forced to close due to the Coronavirus Lockdown.

The grant values are as follows:

  • £4,000 for businesses with a rateable value of £15,000 or under
  • £6,000 for businesses with a rateable value between £15,000 and £51,000
  • £9,000 for businesses with a rateable value of over £51,000

These grants can be claimed on top of the Local Restrictions Support Grants that are also in place to support local businesses that are forced to shut because of lockdown.

How to get this help

You can apply for these grants via your local council.

Coronavirus Job Retention Scheme

Because of the ongoing situation and the increasing severity of the pandemic, the Coronavirus Job Retention Scheme (CJRS) has been extended from 31st October 2020 to 31st April 2021. This news was well needed and means that employers can furlough their staff without having to worry about losing money or laying them off.

The CJRS grant now covers 80% of wages up to £2500 a month. Some employers decide to top up the remaining 20% of their employees’ wage, yet, understandably, not all employers do this due to the fact that they’re already struggling massively to stay afloat.

How to get this help

The CJRS will work just as it has in the past, meaning that the claims can be made either in advance or in respect of an employee for a minimum seven-day claim window. Any employer can request support, even if they were part of the scheme beforehand. You need to be using a UK bank account and UK PAYE.

When applying, you have to:

    • Mark your employees as ‘furloughed workers’, meaning staff members who were made to take unpaid leave
    • Notify these employees that they are furloughed
    • Figure out the amount that you need to claim using the government calculator

Local Restrictions Support Grant for open businesses

As well as these various grants and schemes for closed business, the government is also offering grants to open businesses to support them during the tightened restrictions. These grants are for businesses in Tiers 2 and 3 that have been severely impacted by the Coronavirus Pandemic since August 1st 2020.

The grant can be up to £2100 for every month that the tiered restrictions are in place. They can also be backdated, meaning that locations that have already faced these restrictions can apply for the amount dependant on how long their business was affected for.

The grants are equivalent to:

  • £934 a month for properties with a rateable value of £15,000 or under
  • £1,400 a month for properties with a rateable value over £15,000 and below £51,000
  • £2,100 per month for properties with a rateable value of exactly £51,000 and over

The government has remarked that these grants can be used however the business proprietors see fit, although they expect that the majority of the money should (and probably will) go towards property-related costs such as building taxes.

How to get this help

It is up to local authorities to decide which business will receive these grants, but the government guidelines suggest using it for businesses that are under no legal obligation to close and are facing immensely reduced custom.

Speak to your local council to enquire about the Local Restrictions Support Grant.

Business rates holiday for the tax year of 2020-2021

On top of all of the financial help already offered, the government is cancelling business rates for all of those in the retail, leisure and hospitality businesses.

These business rate cancellations apply for:

  • Leisure businesses like gyms, sports clubs, spas, etc
  • Hospitality businesses like bed and breakfasts, hotels, self-catering accommodation etc.
  • Service businesses like restaurants, cafés, bars, pubs
  • Entertainment venues such as cinemas, arenas and other live music venues
  • Retail shops

There is pressure to prolong these measures for the tax year 2021-22, yet we will have to wait and see how the government rules on that.

How to get this help

This new rate should be automatically applied to your April 2020 Council Tax bill. Use the government’s business rates calculator to discover what you will save in business rates this year.

Coronavirus Business Interruption Loan Scheme (CBILS)

If your business has an annual turnover of £45 million or more, then you can apply for financial assistance to the tune of £5 million in the form of business loans and overdrafts. Better yet, the government has backed this by assuring lenders that they will cover up to 80% of possible losses, as well as paying all of the interest for the first 12 months of the loan.

There has been pressure from the Chancellor as well as the Governor of the Bank of England, Andrew Bailey, to ensure that these lenders “support small and medium-sized enterprises in any way they can” and to provide fair and reasonable interest rates.

How to get this help

The scheme is delivered via the British Business Bank and is now available through participating lenders.

To be eligible, your business has to:

  • Produce an annual turnover of up to £45 million
  • Have a valid and reasonable borrowing proposal
  • Be a UK-based business
  • Have been negatively impacted by the Coronavirus Pandemic

Businesses will have until March 2021 ends to apply for the CBILS. The government reports that all major banks are now involved in this scheme, so get in touch with your bank now to see if you are eligible before the scheme is no longer on offer.

Contact FastPay for help with Direct Debits

There are plenty more grants available for UK businesses to apply for. FastPay have put together a comprehensive list of the latest business grants UK.

If collecting payments automatically and securing your cash flow is a top priority for your small business, let FastPay provide you with a tailored Direct Debit solution.

Our specialist advisors help businesses across the UK to do just this. What’s more, we can get you set up and collecting via Direct Debit in as little as 24 hours..

Call 0161 737 5290 to speak with a member of the FastPay team.

Alternatively, you can request more information about our services or get a quote by completing our quick contact form.

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