The number of people diagnosed with coronavirus is nearing 10,000, with the government imposing stricter measures to slow the spread of the virus. Prime Minister Boris Johnson has urged as many people to work from home as possible and only leaving their house for essential shopping, medicine and a single daily walk, run or cycle. With businesses feeling the instant impact from closures, we take a look at the latest developments in the UK business world.
Support for self-employed to be announced today, Thursday 26th March
The Chancellor Rishi Sunak will announce eagerly awaited financial support for those who are self-employed today (26th March). The government has been under pressure to extend the financial support offered to freelancers and self-employed, which account for 5million of the working population. Many are hoping that the 80% wage subsidy will be extended to those which fall within this category.
Fines for businesses which do not close
The government has confirmed that any businesses which ignore instructions and remain option will face enforcement action, with a potentially unlimited fine. Sportswear store Sports Direct caused outrage this week, when the owner Mike Ashley announced his store would remain open. However, following the backlash from the public over his decision, he has since announced all shops would be closing.
Calls for Brexit transition period to be extended
The Freight Transport Association has urged Boris Johnson to extend the Brexit transition period. There are fears that hauliers will be unable to arrange new agreements while the EU is struggling from the impact of the coronavirus. The current transition period is due to expire at the end of 2020, with the UK currently still following EU trade and customs rules. Talks about a new free trade agreement have currently been postponed following Michael Barnier, the EU’s chief negotiator, testing positive for coronavirus.
Personal guarantees required to access the Coronavirus Business Interruption Loan Scheme
Since the government-backed Coronavirus Business Interruption Loans for business owners launched on 23rd March, there has been some criticism. Several MPs and businesses which have tried to access the loans have described how banks are asking for personal guarantees. Although the government is guaranteeing up to 80% of the loans, some banks are looking for security in the form of business owner’s personal property.
This requirement came as a shock to many, including the MP Kevin Hollinrake who chairs the All-Party Parliamentary Group on Fair Business Banking. Mr Hollinrake raised the topic in the House of Commons to the chief security to the treasury, who confirmed that it was also his understanding that personal guarantees would not be required. When delving further into the fine print, the government has enabled lenders to use their discretion over the level of security banks require.
This security could be in the form of property, personal savings or shares, which could be risked if a business fails and is unable to repay the loan. This could mean that many businesses will be unable to avail of this emergency loan scheme during the coronavirus, which were launched by the government in an effort to protect the economy.
However, Royal Bank of Scotland which also owns NatWest is not asking for personal guarantees. This is putting pressure on other banks such as Barclays and HSBC, which are currently asking business owners for personal guarantees. If your business is searching for a loan to help your business through this difficult time, there are alternatives available.
Here at BusinessComparison we specialise in helping businesses find the most competitive financial products. Whether you are looking for a loan, new bank account or even cheaper business energy, we can help you compare the options. Our panel includes both traditional and alternative providers, so we can help you find the ideal solution. To find out more about the financial support we can help your business secure, please contact our team today.