In this article we summarize how the various schemes and initiatives aimed at small businesses work, what has changed, who is eligible and how to apply.
Local Restrictions Support Grant
The chancellor announced new grants on October 22 for businesses in Tier 2/3 working in the hospitality, leisure and accommodation sectors that were not forced to close but are struggling in areas with the toughest restrictions. The loans of up to £2,100 can be backdated and will be 70% of the amount that is being offered to those businesses in England that must shut their doors to support them with fixed costs.
Are the small business grants repayable?
These are grants, not loans, meaning the money does not have to be paid back.
Is the money taxable?
Yes, the money from the grant will be added to your income and taxed in the usual way.
The government introduced three loan schemes for businesses: the Bounce Back Loan Scheme, the Coronavirus Business Interruption Loan Scheme (split into two for smaller and larger companies) and the Covid Corporate Financing Facility (from the Bank of England). Which you can apply for depends on the size of your business. The deadline for applications was changed on October 31 so you now have until January 31, not November 4 as it was originally, to apply.
How to apply
A number of lenders are participating in the scheme. You should speak to one of them directly about taking out a loan; you will be asked to complete a short, standardised online form. The chancellor has said that businesses won’t need to provide proof of turnover and banks shouldn’t need to do any “forward-looking tests of business viability” before lending the money.
Coronavirus Business Interruption Loan Scheme
This loan scheme is split into two, offering two different loans depending on the size of your business. The first offers access to finance of up to £5m for 10 years (previously six years) for companies with an annual turnover of up to £45m. The government covers interest payments and any loan fees for the first 12 months and will provide lenders with a guarantee of 80% on each loan.
Coronavirus Large Business Interruption Loan Scheme
This scheme helps larger businesses with an annual turnover of between £45m and £500m to get access to loans with a government-backed guarantee of up to £25 million. The loans are aimed at strong, viable businesses that are struggling as a result of coronavirus and are unable to access commercially-backed loans.
How to apply
The schemes are available through more than 50 accredited lenders, including all the major banks, which are listed on the British Business Bank website. You can also demand for the full list here although it’s in PDF and I will have to send in an attachment, no one has to lose their business due to the pandemic all you need is the right information to stay afloat.
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