Small businesses and start-ups in the UK that have been affected by Coronavirus may be able to claim a £10,000 grant from the Government. This is part of a package of support for business recently announced by the Government and also includes the Coronavirus Business Interruption Loan Scheme, which offers loans, asset finance and invoice finance for businesses needing extra cash flow during the pandemic.
There are four schemes available, each for the countries of England, Scotland, Northern Ireland and Wales. The schemes are all based on providing grants to businesses that occupy a premises (both owned and rented) and receive a form of rate relief.
The Small Business Grant Fund (SGBF) is managed by local authorities and provides up to £10,000 as a one-off grant to help small business owners meet their operating costs. Only businesses in England are eligible for the SBGF and businesses can only claim once, even if they have multiple business premises.
Businesses that are eligible need to have been in receipt of small business rate relief (SBRR) or rural rate relief (RRR) on the 11 March 2020. Those small businesses whose premises have a rateable value between £12,000 and £15,000 and receive tapered relief also qualify.
Businesses whose property includes those also for personal use are excluded, along with car parks and parking spaces. Any business in liquidation or dissolved on or before 11 March 2020 are also excluded.
Local authorities will pay the grant to the ratepayer as held on their records from 11 March 2020. If businesses think the local authority records may be incorrect, then they should inform their local authority through the authority’s website, along with their landlord or management agent.
Local authorities in England should contact those businesses they believe are eligible for the SBFG.
Those businesses in Scotland that claim Small Business Bonus Scheme Relief, Rural Relief, Nursery Relief, Business Growth Accelerator Relief and Disabled Relief can apply for a one-off £10,000 grant from their local authority. Business can only claim the grant once and self-catering premises are not included in the scheme. Businesses can apply through online forms available on their local authority website.
The scheme in Northern Ireland is managed by the Department for the Economy and Invest Northern Ireland working with the Department of Finances Land & Property Services. Grants should be available to those businesses eligible for the Small Business Rate Relief Scheme (this is those businesses with a Net Annual Value or NAV of £15,000).
There are 27,000 businesses in Northern Ireland that are believed to qualify for the grant and payments will be made automatically to those businesses that have supplied banking details for the rates system. Businesses that have not received their payment automatically should apply online through a form to be published later this week.
Businesses in Wales who are eligible for small business rates relief (SBRR) and have a rateable value of £12,000 or less should qualify for a £10,000 grant. In Wales, the multiple property restriction allows the same ratepayer to claim for up to two properties in each local authority area. The scheme in Wales is being administered by individual local authorities. Businesses wanting to enquire about the grant should look at their local authority’s website in the first instance.
The Chancellor announced on 27 April 2020 a new business loans scheme called Bounce-back Loans. These will allow small businesses to apply for loans between £2,000 and £50,000 with no need to make any repayments for 12-months. The new scheme launches on 4 May 2020.
Small businesses that don’t qualify for one of the grants above or CIBLS and need to boost their cash flow during the Coronavirus emergency could consider either applying for a standard business loan or using their own personal credit in the interim. While not desirable, access to new commercial and personal credit streams may become increasingly difficult with rising demand and restrictions placed on how properties can be valued for obtaining mortgages. Some business owners may want to consider remortgaging their own home or buy-to-let properties or taking additional funds from their mortgage lender and using this to support their business. Business owners looking at these options may want to look for financial advice and should remember that early redemption penalties may apply for remortgaging early.
Read our news story about the Self-employed support scheme to find out more.
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