We discuss the potential support that may be available for small and medium-sized business that are suffering as a result of the COVID-19 outbreak in the UK. Meant as a companion piece to, this article focuses on the measures that the 2020 budget is taking to mitigate any financial hardship suffered by small to medium-sized UK businesses.
A Call to Action
During last week’s budget announcement, Rishi Sunak, the Chancellor of the exchequer, made it abundantly clear that UK businesses would not stand alone during the Coronavirus crisis. The claim was backed up by a set of ambitious policies that will act as a lifeline now that many business owners, particularly those in the hospitality sector, worst fears have been realised.
The first and most dramatic revelation came in the form of a promised £350 billion lifeline for the UK economy including £330bn in loans. The ‘Coronavirus Business Interruption Loan Scheme’ will support up to a further £1bn in lending to small business with the government guaranteeing bank loans of up to £1.2m whilst covering bank losses of up to 80%.
“The measures set out in the Budget show that this government will support businesses through this turbulent time and keep the economy moving.”
Alok Sharma, Business Secretary
Retail, leisure and hospitality premises with a rateable value between £15,000 and £51,000 will see a large boon in the form of a £25,000 grant, as well as the abolition of business rates for premises with RV up to £51,000 until the end of 2020.
Acknowledging that businesses that pay no rates would not benefit from these measures, Sunak’s budget also offers a £10,000 (increased from £3,000 earlier this week) business grant to these enterprises. However, once up-and-running, your local authority will contact you rather than having to apply yourself-though funding will not be available until April, as stated on the government website.
Regarding potential absence due to sickness, the budget also provides businesses with fewer than 250 employees a full refund for up to 14 days’ worth of Statutory Sick Pay, beginning on day one of absence.
Adding to the significant state support already being offered, a number of private lenders are also loosening their purse strings to help revitalise a lethargic economy. Small businesses will also have access to funds from Lloyds, Natwest and Barclays to the tune of £2bn, £5bn and £7bn respectively.
The ongoing success of smaller businesses will be predicated as much on the intelligent use of these funds as much as the funds themselves, including the accuracy and effectiveness of their budgeting.