The global coronavirus (COVID-19) pandemic has hit UK businesses hard in 2020. Government-imposed lockdowns have shut down company operations across the UK for months on end, leading to a reduction in income, job losses and plenty of unpaid bills. According to the Office for National Statistics (ONS), 16% of UK businesses have had to temporarily shut or pause trading over the summer.
Even as businesses slowly get the green-light to reopen their doors under new health and safety measures, a lot of companies are still going to struggle to make ends meet. Although shoppers are returning to the high street, footfall is down 40% from 2019, and income uncertainty is still a major problem for business owners.
Thankfully, the UK Government has stepped in with ways that UK company owners can claim coronavirus relief. There are quite a few initiatives out there from HMRC, the UK Government and more. For example, you may have already benefited from the HMRC’s invitation to defer Self Assessment payments on account which would have been due on 31 July 2020, or the Coronavirus Job Retention Scheme.
But there are some other great loans and grants out there worth checking out. To help you get started, here are some of the best coronavirus support packages you may be eligible for.
How to get a coronavirus business grant or loan
The best place to start looking for coronavirus relief for your company is to find out if you’re eligible for a business grant. Business grants are typically preferable to loans, because you don’t have to pay back a grant. It’s a cash sum award granted to your company to spend on your business. There are quite a few national, regional and local coronavirus business grant schemes on offer in 2020.
Your company can also apply for a number or government-backed loan schemes if your company has suffered as a result of the COVID-19 pandemic. Most of these schemes are quick and easy to apply for, and offer generous interest rates and repayment programmes to accommodate businesses that are still hurting after the 2020 lockdown.
1. The Small Business Grant Fund (SBGF)
The SBGF is designed for businesses that currently pay little or no business rates, and eligible companies are entitled to a one-off cash sum of £10,000.
This money does not need to be paid back, but it is taxable. If your business doesn’t turn a profit after the grant comes through, you won’t have to pay tax on the grant.
Your business may be eligible for the SBGF grant if you:
- Are based in England
- Occupy a property
- Were eligible for small business rate relief or rural rate relief on 11 March 2020
It’s important to note that if your business rate was changed after 11 March 2020, you should still be eligible to receive a grant. You can’t claim for properties occupied for personal use or non-business-related things like moorings, beach huts or parking spaces.
To claim an award from the Small Business Grant Fund, you shouldn’t have to take any action. If your business is eligible, your local council should contact you with details of how to claim. But if you don’t hear from your council and think you should be eligible, get in touch with them.
After you’ve talked to your local council, you’ll be asked to sign a declaration confirming that you won’t exceed the state aid temporary framework threshold of €800,000 and that your business wasn’t in financial difficulty on 31 December 2019.
If you successfully receive a grant from the SBGF, the money will be paid to the person who was the registered ratepayer of the business property on 11 March 2020.
Find out more about eligibility on the GOV.UK website.
Based in Scotland? The Scottish Government has its own COVID-19 business grants for Scottish companies.
2. The Retail, Hospitality and Leisure Grant Fund (RHLGF)
The government’s Retail, Hospitality and Leisure Grant Fund (RHLGF) is designed to specifically support retail, hospitality and leisure businesses with a business property, which have suffered due to COVID-19. This fund offers one-off payment grants of up to £25,000, which are payable by local councils.
These awards are tiered based on company size. This means the size or value of your business dictates how much coronavirus relief you can get. If your business has a property with a rateable value of under £15,000, you can receive a grant of £10,000. If you’ve got a property with a rateable value of between £15,000 and £51,000, you can receive a grant of £25,000.
Your business may be eligible for an RHLGF grant if:
- You’re based in England
- You’re in a retail, hospitality of leisure industry
- You’ve had a property with a rateable value of under £51,000 on 11 March 2020
If your rateable value has gone up or down after 11 March 2020, it shouldn’t affect your eligibility for this grant.
Properties which should be eligible for coronavirus relief include shops, restaurants, pubs, cinemas or performance venues, letting agents, gyms, hotels, and more. Even if your company has received charitable rate relief or discretionary relief, you can still get a grant from the RHLGF.
Does your business have multiple properties? Good news – you can receive one grant per property, as long as you’re not also getting a Small Business grant on the same property.
You don’t need to take any action to claim an award from the Retail, Hospitality and Leisure Grant Fund (RHLGF). Your local council should automatically identify your business and contact you. But if they don’t, get in touch.
3. The Local Authority Discretionary Grants Fund
The Local Authority Discretionary Grant Fund is for small and micro-businesses based in England which aren’t eligible for the other two coronavirus grant schemes we’ve already covered.
The Local Authority Discretionary Grant Fund offers grants of up to £25,000. Just like other coronavirus relief grants, you won’t need to pay this money back; however, it is taxable if your business turns a profit after the grant has been paid.
Your business should be eligible if you:
- Are based in England
- Have fixed property-related liabilities
- Occupy part or all of a property with a rateable value, annual mortgage, or rent under £51,000
- Were trading on 11 March 2020
You’ll also need to be able to prove that your business has suffered a big drop in income because of the COVID-19 pandemic.
But you can’t apply for a grant from this fund if:
- Your company is insolvent or has received a strike-off notice from Companies House
- You’re receiving an award from the Small Business Grant Fund, Retail, Hospitality and Leisure Grant Fund or industry specific funds such as the Zoos Support Funds or Dairy Hardship Fund
You should still be eligible if you’ve applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme.
Want to find out more about the Local Authority Discretionary Grant Fund? You’ll have to apply for a grant through your local council. Find your local council’s website and apply.
4. The Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) lets small and medium-sized enterprises (SMEs) borrow anywhere between £2,000 and 25% of their turnover up to a cap of £50,000. These loans are 100% backed by the UK Government, and you don’t have to make any payments or interest on a BBLS loan for 12 months. After 12 months, the interest rate on these loans is just 2.5% per year.
The duration of a BBLS loan is 6 years, but you can repay it early without any extra fees.
Unlike some of the grants we’ve covered, these loans aren’t just for businesses in England. You should be eligible for a BBLS loan if your business:
- Is based in the UK
- Has been negatively impacted by COVID-19
- Was established before 1 March 2020
Any UK business can apply for one of these loans unless they’re a bank, insurer, public body or a state-funded school.
Interested? There are 11 UK lenders participating in the scheme, including a few high street banks. You can find a lender here, and apply to them directly for a BBLS loan.
5. The Coronavirus Future Fund
The Coronavirus Future Fund is for bigger UK companies which have been adversely affected by COVID-19 in 2020. This scheme offers loans of anywhere between £125,000 and £5 million; however, as it’s offering a large coronavirus relief package, the eligibility requirements aren’t as inclusive.
Your company may be eligible for The Coronavirus Future Fund if it:
- Is incorporated in the UK
- Was incorporated before 31 December 2019
- Has raised at least £250,000 in equity investment over the last 5 years
- None of its shares are publicly traded
- Has at least half of its employees based in the UK, or half of its revenues are generated by UK sales
If your company meets all of these criteria, you can apply for a loan via the British Business Bank. Applications must be submitted by the end of September 2020 to be considered.
6. The Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) is another loan option for small business owners hit by the pandemic. This scheme provides SMEs with loans of up to £5 million which are 80% guaranteed by the government. CBILS loans come with a duration of 6 years.
You may be eligible for a CBILS loan if your business:
- Is based in the UK
- Has an annual turnover of less than £45 million
- Can demonstrate the business would be viable if it wasn’t for coronavirus
If you want to borrow more than £30,000, you’ll also have to prove your business wasn’t in trouble on 31 December 2019. Most company types can apply for a CBILS loan, apart from banks, insurers, public bodies and state schools.
Interested? Over 50 lenders are participating in this scheme, including high street banks. You can shop for lenders on the British Business Bank website and then apply to that lender directly.
The bottom line
If none of these loan or grant schemes seem applicable to your company, don’t panic. This is just the tip of the iceberg. The UK Government and various local authorities have got a range of other COVID-19 relief packages and services available for limited companies and sole traders.
Want to learn more about running a business? Check out our blog for guides on financing your business, how to form a limited company, managing your company remotely and more.