Michael Foote, Director of Quote Goat, discusses what financial support is available for businesses that aren’t eligible for the government’s new lockdown grants, including the Self Employed Income Support Scheme
The UK’s latest national lockdown in response to the COVID-19 crisis has once again forced the closure of all non-essential retail and hospitality and has greatly limited the operations of thousands of other businesses.
In response to the continued economic fallout of the pandemic, the government has rolled out a new financial package to companies within the hospitality, retail and leisure sectors – leaving many other businesses feeling angry and forgotten about.
With so many business leaders in despair at their bleak economic outlook, here are some support packages that they might not realise are available to them if they are ineligible for the latest lockdown grant.
Bounce Back Loan Scheme
The Bounce Back Loan Scheme provides financial support of up to 25% of a business’ turnover for UK firms that have been impacted by coronavirus and were established before March 2020.
This can range from £2,000 to £50,000 and is available until 31st March 2021, though this may be extended.
The loan is interest-free for the first 12 months, with an interest rate of 2.5% per annum after the first year.
It is also available to top up if you did not initially claim your full entitlement.
A total of 29 lenders are participating in the scheme and to apply, you should approach a lender via their website.
Applications can be completed online, and the lender will decide if you are suitable for the loan or whether an alternative type of financial support is more applicable.
Coronavirus Business Interruption Loan Scheme
Offering loans of up to £5 million, the Coronavirus Business Interruption Loan Scheme is available for businesses with an annual turnover of up to £45 million.
The government will pay interest and any fees for the first 12 months, with the business taking over fees and interest after the first year.
This loan is also provisionally available until the end of March 2021.
All the main retail banks are participating in the scheme and you should apply via their website.
They will require some basic information, as well as various supporting documents, depending on the lender.
Again, the lender will decide if the loan is suitable or if another form of financial support is a better option.
Self-employed income support scheme
For the self-employed, the income support scheme calculates 80% of three months’ average monthly trading profits.
This is then paid out in a single instalment capped at £7,500.
The scheme has been extended with a further grant covering February 2021 to April 2021.
Whilst the claims for this grant have closed, you can still prepare your claim for the fourth grant, with details to be announced on the 3rd March 2021.
You will need details such as a Self-Assessment Unique Taxpayer Reference and your National Insurance number, as well as information regarding your passport and credit history.
You must also keep all information evidencing reduced trade or your inability to trade due to Coronavirus.
Additional Restrictions Grant
The Additional Restrictions Grant [ARG] is available to businesses that are not covered by other grant schemes or where further funding is required.
These finances are distributed by your local council and with grants of up to £3,000 per month, available depending on rateable value.
The ARG Scheme is currently closed but will open again shortly, with information published as soon as it is available.
Conclusion
The impact of coronavirus has unquestionably been devastating for thousands of businesses across the UK, and with no clear end to the current lockdown in sight, there is bound to be further financial turmoil for many before the crisis is over.
This is why it is so important that business leaders are aware of the support that is available to them.
If your business is continuing to struggle as a result of COVID-19, be sure to check the latest financial support that’s available to you – it could be the difference between your business surviving the pandemic or becoming the latest in a very long line of its victims.
