The chancellor Rishi Sunak has announced a new package of financial support to support the economy during the coronavirus outbreak. The original budget which was announced less than a week ago is already out of date, with the UK entering an entirely new world as the coronavirus outbreak spreads. The new package is a welcome relief for businesses across the country which have been promised access to £330bn in loans and a further £20bn in cash grants and rate reductions.
The chancellor described the Covid-19 outbreak as an economic emergency, which the UK has never before experienced during peace time. Many companies across the UK are already feeling the pressure and the government’s announcement is designed to reassure the country that financial support is available. The government has promised that the tools will be provided to help businesses through this difficult time and if the new budget is not enough, more funds will be provided.
Coronavirus Business Interruption Loan Scheme
This is a new loan scheme which will be delivered by the British Business Bank, enabling businesses to access loans of up to £5million. The government is acting as a guarantor for these loans and will cover up to 80% of any losses. The loans will be interest free for the first 6 months, with the government covering these initial interest payments. However, it is important to remember that you will need to meet the loan repayments. It is hoped that these loans will provide businesses with the breathing space they need to be able to remain open.
Statutory Sick Pay
If your business has less than 250 employees, you may be concerned about the cost of providing your staff with Statutory Sick Pay. However, the government has promised to refund businesses in full for 14 days of Statutory Sick Pay. This is estimated to provide up to 2 million businesses with access to £2billion, in an attempt to cover the costs of the potential sick leave periods.
Tax Liabilities and Business Rates Relief
A £10,000 cash grant will be made available to small businesses, which can be accessed via local authorities across the country. The local authorities will also be provided with funding to provide eligible businesses with business rates relief. In addition, your business may be able to arrange a bespoke Time to Pay agreement. If your business would like to discuss its tax liabilities, the government has set up a dedicated helpline. It is hoped these measures will reduce the levels of financial distress which businesses are under, while providing support with tax issues during this period of uncertainty.
Retail, Hospitality and Leisure Businesses
Businesses operating in the retail, hospitality and leisure industries will be eligible for a business rates holiday for the 2020-2021 tax year. In addition, a £25,000 cash grant will be available to businesses in these industries, which operate in small premises with rateable values of between £15,000 and £51,000. The information will be available via local authorities by 20th March.
During financial difficulties it is important that businesses have access to loans and other forms of credit, such as overdrafts and credit cards. Many businesses will be looking for ways to improve cash flow during the outbreak to ensure the future of their business. Here at BusinessComparison we are ideally placed to help you find the best financial products available.
Whether your business is looking for a competitive loan, a new credit card, a bank account with an overdraft or even cheaper utility providers, we can help. Supporting businesses through this difficult time is our top priority and we have a network of excellent suppliers who can offer the best deals available. To find out more about our comparison services, please contact our experienced team today.