18 Mar COVID-19 Update for Businesses – From Simply Business Finance
On Tuesday, the Chancellor set out additional measures the Government will be implementing in response to the Coronavirus outbreak in order to minimise the economic impact. A summary of the key policies follow but do keep in mind the measures that had already been announced in last week’s budget; particularly the ability for businesses to defer debts due to HMRC for PAYE, VAT and Corporation Tax.
In many cases this may be an effective step businesses can take to assist with cash flow and liquidity.
Other policies being extended to help SME businesses include;
Corona Business Interruption Loan Scheme (‘CBILS’)
CBILS will be offered by Banks, certain criteria will have to be met and businesses will have to go through an application stage. We understand that Bank are looking at their processes to reduce the underwriting time. CBILS will be up and running early next week and aims to provide liquidity to viable businesses which cannot access finance because they have insufficient security to meets lender’s normal requirements. The loans will be interest free for 6 months.
The general advice currently is that if any business is struggling with their current financial commitments, they contact the loan provider directly and discuss options with them.
Some banks/lenders will allow payment holidays/rescheduling of the loans – Banks have themselves put £bn’s aside to assist with businesses during this period of uncertainty.
Business Rates and Grants
Business Rate Holidays have been expanded to assist the retail, hospitality and leisure sectors. All businesses in those sectors will now pay no business rates for 2020/21 irrespective of their rateable value.
Grants will be available to businesses and these will be administered by local authorities.
The grant scheme announced in the budget last week delivers cash grants to 700,000 of the smallest businesses in the UK who already pay no or little Business Rates due to Small Business Rate Relief (‘SBRR’).
SBRR has now been extended from £3,000 to £10,000. Those businesses currently eligible for SBRR will now be able to apply for non-repayable cash grants of up to £10,000.
There will be further clarification in the coming days and at the moment there is still work be done before implementation, so this is subject to change, and we’ll do our best to keep you informed.
Please remember there are many other sources of funding available to business, these should also be considered.
Stay safe and look after yourselves.
Simply Business Finance