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COVID-19 Small Business Schemes

Future of Work
Published - 2nd April 2020. This article is a 3 min read

Our on-demand pool of operational, legal and finance professionals can help you solve your pressing business needs remotely, from cash flow forecasting to accessing government grants.

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We appreciate that this is a very uncertain time for all businesses, but especially SMEs and Startups. Generating revenue, let alone achieving growth is often a daily struggle, never mind a national lock down to make matters worse.

The underdetermined end to all of this makes thinking about the future daunting. Saying this, there is good news. The government have implemented a variety of schemes to support businesses through these tricky times. Depending on a variety of business factors such as; size, industry and financial health, will determine which schemes are available to your business.

These offerings have been put in place in order to support businesses who have been seriously impacted by COVID-19. A number of options such as; deferring VAT payments, supporting businesses paying sick leave and cash grants in certain industries are a few examples of what’s being offered. You can find out more information on what may be available to you by reading the Government's website.

The two substantial schemes in place which will have a big impact on SMEs during this current climate are; The Coronavirus Business Interruption Loan Scheme (CBILS) and The Coronavirus Job Retention Scheme (“Furlough”). If eligible for these, there is no doubt they should help keep many businesses running across the UK during this lockdown.

So, let’s breakdown these two schemes for you.

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The Coronavirus Business Interruption Loan Scheme (CBILS)
This is in place to help support SMEs across the UK that are losing revenue due to COVID-19 and are experiencing cashflow disruptions. This is being offered by over 40 accredited lenders such as; high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders. Any of these lenders can lend up to £5 million, whereby the government will pay any interest or fees for up to 12 months on the loan.

These lenders are assisting with this scheme as the CBILS gives a government-backed guarantee on the loan repayments. However, the borrower bears the primary obligation for the loan and always remains 100% liable for the debt.

In order to be eligible for the CBILS, your company must have UK based business activity, an annual turnover no more than £45 million and a borrowing proposal.

The Coronavirus Job Retention Scheme (“Furlough”)
This has been set out to cover wages for employees on temporary leave (“Furlough”) due to COVID-19. Employers can use a portal to claim back 80% of the furloughed employees usual monthly wage up to £2500. This is open to UK employers for at least 3 months, starting from 1st March 2020. The furlough option is there for companies whose operations have been severely impacted by COVID-19.

Before making any changes to contracts this needs to be agreed with your employees. You may find seeking legal advice useful to help you through this process. Once agreed with employees, you will need to submit a detail claim with all of the necessary requirements. If accepted, the government will pay via BACS payment to your UK bank account.

Hopefully this has helped outline what your business could qualify for during this period. Nonetheless, this is still overwhelming, and you may not have the expertise in house needed to deal with this. So, this is where we come in.

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You've Got This! matches businesses with skilled professionals on short-term projects to help solve your pressing business needs. Whether that be legal help on furloughing your employees or advice from an experienced accountant when applying for a loan through the CBILS. You can sign-up as a business here or email [email protected] and we will do our best to match you with the support you need to get through this.

Don’t worry, We’ve Got This!

Author - Sophie Goddard

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