Small business support: A roundup of the latest financial schemes and how to access them

Featured Business, Small Business Advice 25 March 2020
Cafe Owners in Shop

Last week we delivered our commitments to protecting our customers, partners and employees. We outlined the measures that both Paymentsense, and the government have implemented to protect business continuity, while remaining compliant with the government’s health and safety protocols. 

Developments have been occuring every single day, and we’ve been monitoring them in order to develop our own support measures. 

Friday 20th March marked the official closure of all restaurants, bars, pubs, cafes and theatres and on Monday 23th March, we saw the UK Prime Minister announce a ‘lock-down’. This meant the closure of all non-essential retailers. 

In response to this news and in order to protect small businesses, the chancellor released a number of financial support initiatives. 

We understand that at such a volatile time, as an employer and business owner, it’s both time consuming and confusing to navigate this information. Our priority is supporting businesses in any way we can, so we’ve rounded up details of all of the schemes that are available so far, and how to access them.

 

Schemes for hospitality, retail and leisure businesses

The below two government schemes are specifically aimed at the hospitality, retail and leisure industries, who have been heavily impacted by closures.

Business Rates Holiday for Retail, Hospitality and Leisure

What is it?

If you operate in the above sectors, you are able to receive additional financial relief by stopping your rate payments.

How can it help?

Another scheme to reduce outgoings, the rate relief means you will:

  • Pay no business rates for 12 months, commencing from 1st April 2020
  • Not be limited to a value threshold: all businesses in this industry will benefit from this

How to apply

There is no application for this, as it will be dealt with by your local authority who will recalculate your bills for you automatically. 

To help you reforecast your budgets, you can estimate the rates you will no longer be charged this year by using the government’s business rates calculator

You can find more official guidance here.

Cash Grant for Retail, Hospitality and Leisure

What is it?

In addition to waiving business rates, the government is offering cash grants to businesses in England that fall into the retail, hospitality and leisure sectors. This enables them to receive a cash grant of up to £25,000 per property

If your business rateable value is under £15,000 you will receive £10,000.

Businesses with a rateable value of between £15,001 and £51,000 will receive £25,000.

How can it help?

While managing outgoings, the government realises that revenue drops are impacting the ability to pay property rent, employee wages, supplies and all of the other important costs that come with running a business. Grants are available to support businesses with the much-needed funds they need during times of ceased-trading. 

Eligibility criteria

If your business falls under either retail, hospitality or leisure and is operating in England you are eligible.

How to apply

Again, this scheme is controlled by your local authority, who will contact you directly by post if you meet the criteria.

BiteBack with Paymentsense

Alongside the above two government funding initiatives, Paymentsense has launched its new BiteBack scheme, allowing dine-in restaurants to transform into a takeaway service. 

What is BiteBack?

BiteBack is a free new tool-kit that enables businesses to operate as a takeaway in a few simple steps.

The scheme:

  • Provides businesses with a free website where they can host their menu and take online orders 
  • Empowers restaurants, cafes and pubs to promote their new offering online and distribute menu flyers in their local area
  • Supplies food service industries with gift vouchers to generate income now
  • Gives businesses an exclusive 15% discounted rate on sustainable takeaway packaging   

How can it help?

It allows business owners across the hospitality sector to maintain business continuity and generate income when they are unable to open for sit-in diners.

Eligibility criteria

At present, the scheme is available to all Paymentsense customers straight away. 

If you’re not currently a Paymentsense customer, you can still receive the BiteBack incentives by filling out the form on the BiteBack page where our team will be in touch. 

How to apply

Visit the BiteBack page here and see our blog post for further reading.

Available schemes for all small-medium businesses

Small Business Grant Funding

What is it?

Additional funding for local authorities in England, to support small businesses that already pay little or no Business Rates because of Small Business Rate Relief (SBBR). 

Local councils can provide a one-off grant which has been increased from the initial £3,000 to £10,000. This will be available to around 700,000 businesses that are currently eligible for SBRR or Rural Rate Relief. 

How can it help?

If you’re eligible for the scheme, you will receive a one-off grant of £10,000 to support your ongoing business costs. This grant is not repayable, and businesses can only access one grant, even if they have multiple properties. 

Eligibility criteria 

You will have access to this grant if you’re a business based in England with property, and you’re already receiving SBRR and/or RRR. 

How to apply

You do not apply for this scheme. Your local authority will know already if you meet the criteria, and will reach out to you via post or telephone.

Coronavirus Business Interruption Loan Scheme (CBILS)

What is it?

A loan scheme available through the British Business Bank for all small and medium businesses with less than £45 million annual turnover and operating in the UK. 

How can it help?

If you’re experiencing cash flow problems due to a drop in revenue, you’re able to borrow up to £5m, available on repayment terms of up to six years. For the first 12 months, the government will pay all interest and fees.

Through CBILS, you can also access:

  • Term loans
  • Overdrafts
  • Invoice finance
  • Asset finance

Eligibility criteria 

  • Annual turnover of less than £45m
  • UK based in business activity 
  • Have a borrowing proposal which would be considered viable by the lender (caveats are accepted in the current circumstances)

How to apply

The CBILS scheme is available through over 40 of the British Business Bank’s accredited lenders. However, not every accredited lender can provide every type of finance listed.

Once you’ve decided which lending option will support you best, use this page on the British Business Bank’s website to filter by your region and financial offering in order to find a suitable lender. From there you will be directed to more specific application guidance. 

For more details on CBILS, please see the government advice here, and the British Business Bank guidance here.

Coronavirus Job Retention Scheme

What is it?

With forced closures across a number businesses, the government has introduced this scheme to support job retention and help reduce redundancies. HMRC will reimburse up to 80% of employee salaries, across UK businesses of all sizes, for all staff who have ceased working, but remain on the payroll.  

How can it help?

The scheme allows businesses to keep on staff and reduce redundancies, by paying the majority of their salary – up to £2,500 per month. 

The scheme covers wages backdated to March 1st and is initially open for 3 months with plans for extension if needed. 

Eligibility criteria 

This scheme is only applicable to current employees on your PAYE that are unable to work due to the impact of the Coronavirus on your business. 

In order to access these salary repayments, you’ll need to ensure that you amend the status of all affected employees on your payroll to furloughed workers

How to apply

The government is in the process of setting up an online portal hosted on the HMRC website for you to access reimbursement. They aim to get this live before the end of April.  

Find out more details here.

Statutory Sick Pay Rebate

What is it?

New legislation for small-medium businesses (less than 250 employees) to reclaim Statutory Sick pay, for COVID-19 related employee absence.  

How can it help?

If you’ve had a large number of staff off due to coronavirus, you can seek financial relief, enabling you to further protect your cash flow during this turbulent time. 

 Your refund will cover up to 2 weeks statutory sick pay per each employee who has been off work due to the virus.

Eligibility criteria 

You can access a rebate if you employ less than 250 people (as of 28 February 2020) and you’re operating in the UK.

How to apply

The government is still developing a process for employers to access their rebate. This will be announced in the coming months on the official government portal.

Time To Pay

What is it?

To further assist all businesses in the UK who are under intense financial pressure, HMRC are working to support any business with outstanding tax liabilities, on a case-by-case basis.

How can it help?

The scheme is designed to help businesses with their outstanding tax payments and liabilities, in order to protect their income. If your business will struggle to pay any upcoming taxes, or needs support with previous outstanding ones, contact HMRC. 

 Eligibility criteria

Any business currently paying taxes to the UK government and that has outstanding tax bills is eligible, however arrangements are agreed case-by-case.

How to apply

Call the dedicated HMRC COVID-19 hotline on 0800 0159 559.

VAT deferral scheme

What is it?

Under this UK wide scheme, businesses will not have to pay any VAT for three months. 

How can it help?

The government recognises that outgoings should be minimised as much as possible during the pandemic. By deferring VAT, this gives businesses one less payment to worry about at a highly disruptive time.

Eligibility criteria

All businesses registered for VAT payments are eligible for this scheme.

How to apply

There is no need to apply for this scheme. All UK registered businesses will not need to make any VAT payments during these next three months.

Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities they have accumulated during the deferral period.

Other tips to help small businesses manage cash-flow

Alongside the above listed schemes, there are other things that small businesses can implement to help manage their cash flow.

Manage your inventory and supply chain

Speak to your suppliers directly to manage contracts for supplies during the coming months. In these exceptional circumstances, it’s likely that they will negotiate any outstanding contracts or agreements, in order to pause payment and goods until further notice. 

If you’re a restaurant with surplus stock, consider creating food packages for delivery or collection that can be sold to the general public. This can be done through the BiteBack website.

Double check all outgoings and make cuts

Managing outgoings is crucial during such an unpredictable period. While there was no way of anticipating such a turbulent time for trading, there are things you can act upon now to relieve financial pressure. 

  • Make a list of everything essential that you still need to keep your business running 
  • Make a list of everything that you are currently operating with that can be paused or cut now and readopted at a later date

Make a list of everything that is unnecessary for business continuity and can be cut with immediate effect

Apply for funding

As well as the schemes available from the government, Paymentsense customers may also be eligible for Business Funding. This is provided by one of our partners (and not by the government) and is of use to businesses who require quick, flexible finance.

What is it?

Business Funding offers eligible Paymentsense customers fast and flexible access to capital. It’s a quicker alternative to a traditional bank loan, with repayments that are proportionate to your earnings.

How does it work?

You select the funding amount and a repayment option. Repayments are taken as a fixed percentage of your card takings, meaning you only repay as you get paid.

How do I apply?

Read more about Business Funding and apply online here

 

We know that the current situation is completely unpredictable and has had a very real impact on everyone, not least small business owners. 

We’re dedicated to supporting you in every way that we can. The Paymentsense team will keep you updated with the various support measures in the coming weeks. 

If you need further guidance, visit the government page to find your local council.

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