Lockdown Grants: A (Necessary) Lifeline For The Many Businesses Struggling To Cope

Last week, Rishi Sunak announced that the government would be providing one-off top-up grants for those businesses operating within retail, hospitality, and leisure. These grants are worth up to £9,000 (per property) and are intended to help support businesses through to the Spring.

Of course, these grants have pretty much become a necessity for these businesses, given that Boris Johnson plunged the UK into its third national lockdown shortly after the new year began. This decision has not been a popular one, with businesses everywhere bracing themselves for another economically disastrous period.

These grants are part of an additional £4.6 billion package geared towards helping businesses survive another difficult period, with support aimed at the businesses most adversely affected by this third lockdown – so restaurants, pubs, hotels, shops, and leisure facilities are firmly at the top of the list.

It’s expected that around 600,000 business properties across the UK are eligible for these grants and the cash, worth £4 billion, will cover some of the lost profit induced by another lockdown, which is currently in place until mid-February. Should the lockdown be extended, which isn’t all too unlikely given past experience, then the government may need to bolster this amount to help businesses cope with the unprecedented drop in profits they face.

How Much Will Your Business Be Eligible For?

If your business has been legally required to close and cannot operate remotely, the amount you will receive will be based on the rateable value of your business property. If you aren’t sure about the rateable value of your property, get in touch with the Valuation Office Agency (VOA) who can provide the information you require to work out your business rates. Once you have established the rateable value of your business property, the grant amounts available are outlined below:

• £4000 if your business has a rateable value of £15,000 or under
• £6000 if your business has a rateable value of between £15,000 and £51,000
• £9000 if your business has a rateable value of over £51,000

These grants are expected to benefit lots of businesses, though, for many, this one-off grant simply isn’t enough – or even close to being so. If your business does not qualify for one of these new grants, or does, but finds itself still struggling on, don’t despair, as there is additional support available.

There are existing measures in place to help businesses across the UK during the pandemic, so certainly don’t view these grants as a last chance saloon for your SME. There is plenty of government support available for your business and other options include:

– Coronavirus Job Retention Scheme (CJRS): This scheme has been extended until the end of April 2021, meaning you can claim 80% of an employee’s usual salary, up to a maximum of £2,500 per month. You can only claim for employees who were employed on or before the 30^th of October 2020 and your business must have made a PAYE RTI submission to HMRC between the period of the 20^th of March 2020 and the 30^th of October 2020. Claims that are made from the 1st of November 2020 have monthly deadlines and must be submitted within 14 calendar days of the month they relate to – unless this happens to fall on a weekend, in which case it is then the next working day. Employers are able to claim either before, during or after payroll has been processed, the only proviso being that the claim is submitted by the deadline.

– Statutory Sick Pay Refunds: For businesses that employed less than 250 people as of the 28^th of February 2020, across all PAYE payroll schemes, it is possible to claim back up to 2 weeks of Statutory Sick Pay (SSP). Your business can use this scheme if it has already paid SSP or if your business needs to claim for an employee who’s eligible for sick pay as a consequence of contracting COVID. This scheme covers all types of employment contracts, including full-time employees, part-time employees, those working for your business on agency contracts, as well as those on either flexible, fixed-term or zero-hour contracts.

– Coronavirus Business Interruption Loan Scheme (CBILS): This scheme is currently running until the end of March 2021 and through it, you can claim up to £5 million. Available through participating lenders, this government-backed loan means that your business is not expected to pay any interest or lender fees for the first 12 months. With a CBILS loan from Nucleus, your business can borrow up to £250,000 and terms last up to 6 years, meaning your business has plenty of time to repay the loan whilst getting back on its feet.

– The Future Fund: This scheme enables UK businesses to access government loans between £125,000 to £5 million, providing that business has at least equal match funding from private investors. This scheme is particularly attractive to those businesses that rely on equity investment and who are unable to access the more popular government business support schemes due to being pre-revenue or pre-profit. The deadline for applications is January 31^st 2021.

– Bounce Back Loan Scheme (BBLS): This scheme was launched last year to help SMEs access finance more swiftly due to the pandemic. Businesses can borrow between £2000 and up to 25% of their turnover, with the maximum cap being £50,000.  As with a CBILS loan, businesses are not expected to pay any interest or fees for the first 12 months and after a year, the interest rate will be 2.5% yearly. Your business can apply up until the end of March 2021.

For more information regarding business management during the pandemic, check out the rest of our Coronavirus Hub or go directly to the gov.uk website.