Government Support for COVID-19 affected businesses

On the 17th of March, the Chancellor made an announcement detailing an expanded set of measures for supporting businesses through the current Covid-19 pandemic.

This includes unlimited loans and guarantees to support firms and help them manage cashflows through this period. The Chancellor will make available an initial £330 billion of guarantees – equivalent to 15% of UK GDP.

The chancellor also announced £20bn of business rates support and grant funding to help the most-affected firms manage their cash flow through this period by:

  • Giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months
  • Increasing grants to small businesses eligible for Small Business Rate Relief from £3,000 to £10,000
  • Providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000

Coronavirus Business Interruption Loan Scheme (CBILS)

At budget 2020, the Chancellor also announced the Coronavirus Business Interruption Loan Scheme which is now accepting applications. CBILS is provided by the British Business Bank through 40 participating providers including all major banks.

This measure is targeted towards all SMEs affected by Covid-19, and not just those unable to secure regular commercial financing, so long as they meet the scheme’s eligibility criteria

As well as loans, there are many other types of finance supported by CBILS, depending on the provider. These include term facilities, overdrafts, invoice finance facilities, and asset finance facilities.

The scheme offers attractive terms for businesses applying for new facilities and the Government will cover the first six months of interest payments so businesses will benefit from lower initial repayments.

The maximum value of a facility provided under the CBILS is £5 million and the borrower always remains 100% liable for the debt.

To access the scheme and to find out what type of finance a provider offers, applicants should contact a provider.

Coronavirus Job Retention Scheme (CJRS)

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least four months starting from 1 March 2020.

The CJRS should be operational and taking applications by the end of April and is designed to support employers whose operations have been severely affected by Coronavirus (COVID-19).

Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

Employers can use this scheme anytime during this period.

The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.

For more information see the Government guidance for the CJRS.

Bounce Back Loans Scheme (BBLS) (Opens 4 May)

The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000.

The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.

Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme will be delivered through a network of accredited lenders.

To apply for a Bounce Back Loan go to the Government Bounce Back Loans Scheme website.

For the latest business advice from the Government please see the Business Support website.

As part of its response, the D2N2 Growth Hub is running a series of free webinars on a range of topics for businesses.

Business Support Grants and help with Business Rates are available via your Local Authority.