Key support measures introduced by Government include:
Coronavirus Business Interruption Loan Scheme (CBILS) – Guarantees loan facilities of up to a maximum of £5mil, available on repayment terms up to six years for term loans and asset finance. For overdrafts and invoice finance facilities, terms will be up to three years. The scheme provides 40 accredited lenders with a government-backed guarantee against the outstanding facility balance. The Government will pay all fees and interest for the first 12 months of the loan term. To be eligible companies must have an annual turnover less than £45mil. Details on how to access the scheme can be found here
Coronavirus Job Retention Scheme – Employers can claim for 80% for furloughed employees usual monthly wage costs up to £2500 a month, plus associated Employer National Insurance contributions and minimum employer pension contributions on that wage. The Scheme is open to all UK employers for at least 3 months from 1 March 2020. Further details on how to access funding can be found here
Covid-19 Corporate Financing Facility (CCFF) –The CFF allows large companies to apply for loans for up to 12 months by the Bank of England buying their commercial paper. Companies – and their finance subsidiaries – that make a material contribution to the UK economy are able to participate in the facility. More details on eligibility and how to access the facility can be found here.
Statutory Sick Pay Rebate – Government intends to bring forward legislation which will allow companies with less than 250 employees (as at 28 Feb 2020) to recover Statutory Sick Pay paid for sickness absence due to COVID-19.
Cash Grant for Retail, Hospitality and Leisure with a cash grant of up to £25,000 per property. To be eligible the business must be based in the UK and have a rateable value of under £51,000
Time to Pay– All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible on a case by case basis to receive support with their tax affairs through HMRC’s Time To Pay service.
Deferral of VAT payments for up to three months
Details of the Government's full package of measures can be found here.
On Monday 20 April, HM Treasury and the Department for Business, Energy and Industrial Strategy (BEIS) announced the coronavirus Future Fund. The Future Fund, which will be delivered in partnership with the British Business Bank, has been established to ensure that the UK’s startup sector, including high growth companies, remains viable during the current crisis. The fund will give Government loans to UK-based companies ranging from £125,000 to £5 million. Whilst the full eligibility criteria has not yet been published, the Future Fund headline terms can be found here. The headline terms state that a business must be an “unlisted UK registered company”.
At present, it is unclear whether “unlisted” will include companies with their shares issued on AIM or the Aquis Exchange. The QCA is currently in communication with the Treasury and BEIS to determine if these companies will be eligible for the fund.
Government update CBILS
On 3 April 2020, the Government announced changes to the Coronavirus Business Interruption Loan Scheme (CBILS). Under the CBILS, SMEs can obtain Government loads of up to £5 million to help them deal with the impact of the Coronavirus (Covid-19) pandemic. At the time of updating the scheme, the Government stated that it had made over £90 million worth of loans to nearly 1,000 smaller companies since its launch on 23 March 2020.
However, amidst continued pressure from businesses, the Government have issued several changes, which came into effect on Monday 6 April 2020, including:
- Lenders will no longer be permitted to refuse applications for a CBILS on the basis that the applicant is eligible for regular commercial financing. Companies who have previously been refused CBILS loans can reapply.
- Lenders will no longer be able to request personal guarantees for loans under £250,000.
- Additional operational changes have been made to speed up the lending approval process.
For more information on the CBILS and the changes the Government has made, please click here.
In addition to the above schemes, there is also a business support helpline you can contact on 0300 456 3565, which you can use to talk to someone about how the schemes may apply to your business.
HMRC have an additional helpline set up to support businesses and self-employed people concerned about not being able to pay their tax, which you can contact on 0800 0159 559.
Some QCA members have raised with us the challenges they are facing in accessing certain schemes. We want to know how small and mid-cap companies are dealing with the current crisis, particularly in relation to raising finance, so please let us know via our survey or by getting in touch directly.
The QCA is in communication with government departments and regulators with regards to smaller quoted companies' needs at this time. The more information we can get on this, the more we will be able to persuade regulators and policymakers to support our sector.