CPA Bulletin

22 CPA Bulletin > May 2020 www.cpa.uk.net POLICY: 1 POLICY The Government has set up and created a number of schemes to help employers and employees in these uncertain times. Each scheme has been designed to help companies find the right one that meets their needs and gives them a degree of support as the lock down due to the coronavirus epidemic continues to hit the plant-hire sector and the rest of the wider construction industry. At the time of writing, the main ones are: SMALL BUSINESS SUPPORT GRANT FUNDING (England only) www.businesssupport.gov.uk/small-business-grant-funding/ • The Government provides additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. • You are eligible if your business is based in England, is in receipt of small business rate relief or rural relief (fromMarch 11), and your business occupies property. • To access it, eligible businesses will be contacted by their local authority, though some local authorities have decided to operate an applications process. Any enquiries on eligibility for, or provision of, the grants should be directed to the relevant local authority. • An early payment of £3.4bn was made to local authorities at the end of March. Each local authority in England has now received the funding, although they will need to collect further information from each business that applies. SUPPORT FORMEDIUM-SIZED BUSINESSES - THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME www.businesssupport.gov.uk/coronavirus-business-interruption- loan-scheme/ • The scheme supports small and medium-sized businesses, with an annual turnover of up to £45m, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years. • It will be delivered through commercial lenders, backed by the Government-owned British Business Bank. The government will provide lenders with a guarantee of 80% on each loan. The government will also make a Business Interruption Payment to cover the first 12 months of interest payment and any lender- levied fees, so businesses will benefit from no upfront costs and lower initial repayments. • The scheme was extended so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing are eligible. This change is designed to enable all long-term viable businesses experiencing difficulties as a result of the coronavirus outbreak to access finance. • There are 40 accredited lenders able to offer the scheme, including all the major banks, and the government expects the scheme to run for an initial period of 6 months. There is no limit on the capacity of the scheme. • The scheme is eligible for companies that: • Are UK-based in its business activity • Have an annual turnover of no more than £45 million • Have a borrowing proposal which the lender: a) would consider viable, were it not for the COVID-19 pandemic b) believes will enable you to trade out of any short-term to medium-term difficulty. Companies can apply for the scheme via their lender’s website or through one of the 40 accredited finance providers offering the scheme.The lender has the authority to decide whether to offer the company finance. SUPPORT FOR LARGE BUSINESSES - THE LARGE BUSINESS INTERRUPTION SCHEME www.businesssupport.gov.uk/coronavirus-large-business- interruption-loan-scheme/ • The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m, giving banks the confidence to lend to many more businesses which are impacted by coronavirus. Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest. • At the time of writing, the Government expect the scheme to be delivered through commercial lenders. The Government will provide lenders with an 80% guarantee on individual loans for businesses that would be otherwise unable to access the finance they need • Lenders will still be expected to conduct the usual credit risk checks, but this scheme allows them to specifically support business that were viable before the COVID-19 outbreak but are facing significant cash flow difficulties, that would otherwise make their business unviable in the short term. • The scheme was launched in April, supporting a wide range of businesses to access finance products including short term loans, overdrafts, invoice finance and asset finance. • Businesses would remain responsible for repaying any facility they may takeout. Covid-19 - Government support mechanisms for companies