Emergency Loan Schemes

Following on from our ‘Preparing for Business Funding’ update earlier this week, the Chancellor has today announced further assistance to those wishing to seek additional finance under the Government’s Emergency Loan Schemes.

Following widespread reporting that the Coronavirus Business Interruption Loan Scheme (CBILS) was proving too onerous and wasn’t reaching SMEs, the Chancellor has announced that the CBILS will be extended to ensure that all viable small businesses affected by COVID-19 can access the finance they need to continue operating during this difficult period. The move extends the scheme to further businesses and not just those who are unable to secure regular commercial financing.

With further concerns raised regarding the requirement of personal guarantees (PGs), the Chancellor also announced that lenders can no longer request a PG for loans less than £250,000. For those loans of more than £250,000, PG’s will now be limited to just 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets.

Lenders were already prohibited from asking business owners to put their house on the line in return for a cash injection and today’s announcement goes a step further by providing additional reassurance concerning personal assets.

The speed at which loans are to be considered and approved is also set to increase in a bid to ensure faster lending, and the Government will continue to cover the first twelve months of interest and fees as already agreed.

Large businesses also received a boost following the launch of a new Coronavirus Large Business Interruption Loan Scheme (CLBILS), which captures many organisations that were left out by the Chancellor’s original measures. This new scheme provides a Government guarantee of 80% to those banks delivering loans of up to £25m to businesses with an annual turnover between £45m and £500m.

Whilst the loans backed by this guarantee will be offered at commercial rates of interest, the Government will not cover any interest or fees in the same way as promised under the smaller business loan scheme.

Further details concerning CLBILS will be announced later this month and we will ensure that you remain fully informed of the latest information.

According to today’s statement, the Chancellor will be liaising with bank Chief Executives next week to discuss both schemes and to ensure that ‘everybody is playing their part’.

Hopefully, these measures will give businesses more confidence to pursue vital funding.

If you need any assistance in preparing your funding proposal, Champion is here to help.

Coronavirus Statutory Sick Pay Rebate Scheme

Employers that are currently claiming for an employee who is eligible for sick pay due to the any sickness absence caused by COVID-19 may be eligible for the Coronavirus Statutory Sick Pay Rebate Scheme.

An eligible business must have:

  • A PAYE payroll scheme that was created and started on or before 28 February 2020
  • Fewer than 250 employees on 28 February 2020

The scheme covers all types of employment contracts, including:

  • Full-time employees
  • Part-time employees
  • Employees on agency contracts
  • Employees on flexible or zero-hour contracts

The scheme also includes companies that are connected and charities, so long as the total combined number of PAYE employees were less than 250 on or before 28 February 2020.

The scheme will repay your business the current rate of SSP paid to current or former employees for periods of sickness starting on or after 13 March 2020. If you pay more than the current rate of SSP, you can only claim the current rate amount.

The repayment will cover up to two weeks, starting from the first day of sickness, if an employee is unable to work as they either:

  • Have Coronavirus
  • Cannot work because they are self-isolating at home

Employees do not have to provide you with a doctor’s fit note for you to make a claim.

You must keep records of all the statutory sick payments that you wish to claim from HMRC, including:

  • The reason why an employee could not work
  • Details of each period when an employee could not work, including start and end dates

Currently, there is no known end date for the scheme. This will be revealed by HMRC in due course.

Business rates holiday

The 2020 Spring Budget may seem like a distant memory, despite only a few weeks having passed. During his Budget announcement, the Chancellor revealed supportive measures for retail, hospitality and leisure companies that pay business rates in England, in the form of a business rates holiday.

From the start of this month, if your business is eligible, you should receive an amended business rates invoice for the 2020/2021 tax year. Businesses in Wales and Scotland will also receive support under a similar scheme.

Your business property will benefit from the relief if it is wholly or mainly being used:

  • As shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • For assembly and leisure
  • For hospitality, such as hotels, guest & boarding premises or self-catering accommodation

The relief covers all manner of business properties. The full details – and it is worth a read to ensure you don’t miss out – can be found here: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

Some examples include:

  • Shops, such as florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets etc.
  • Charity shops
  • Opticians
  • Post offices
  • Car/caravan showrooms
  • Second-hand car lots
  • Markets
  • Petrol stations
  • Garden centres
  • Art galleries (where art is for sale/hire)
  • Hair and beauty services, such as hairdressers, nail bars, beauty salons, tanning shops etc.
  • Shoe repairs/key cutting
  • Travel agents
  • Restaurants
  • Takeaways
  • Sandwich shops
  • Coffee shops
  • Pubs
  • Bars

This is a crucial boost to cash flow, so we recommend that you monitor your business post – which is important for those who may be working from home or currently closed due to COVID-19 – and ensure that you take advantage of the available business rates holiday.

If in doubt, you should contact your local authority via their website.