Lockdown 2: Schemes and Supports for UK Businesses

‘I’m under no illusions how tough this will be for businesses and I’m truly, truly sorry for that.’ - Rishi Sunak, PM

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Emmet Banahan
November 5, 2020

Prime Minister Boris Johnson spoke to people and business owners in a Halloween address, on Saturday the 31st of October, announcing the second lockdown in six months in the UK.

To soften the extent of the impact of government restrictions, Prime Minister announced further economic support for people and businesses as part of a government plan in response to the coronavirus outbreak.

Government phone lines and web chat remain very busy at this time, so the quickest way to find the support you need is on GOV‌‌‌.UK.

Chancellor for the Exchequer, Rishi Sunak, stated that some supports and schemes will be extended, one of which is the Furlough/ Coronavirus Job Retention Scheme.

Disclaimer: While we are providing the most up-to-date supports and schemes for your business, it is important to note, that for whatever reason during these unprecedented circumstances, they can change at any time. This article has been collated and summarised from Her Majesty’s Revenue and Customs and the Gov.uk websites. This article is not financial advice.

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Here are a list of schemes and supports below that your business can avail of:

Coronavirus Large Business Interruption Loan Scheme

This government scheme will help medium to large-sized businesses to access loans and other kinds of finance up to £200 million.

The government guarantees 80% of the finance to the lender.

The scheme is open to applications until 31 January 2021.

If you’re a smaller business, you may be entitled to other government support.

Eligibility

You can apply for a loan if your business:

is based in the UK
has an annual turnover of over £45 million
has not received support under the Bank of England’s COVID-19 Corporate Financing Facility (CCFF)

You need to show that:

your business would be viable were it not for the pandemic
your business has been affected by coronavirus
the loan will enable you to trade out of any short-term to medium-term difficulty resulting from coronavirus

Find the financial support your business needs. Click here.

If you’re borrowing more than £50 million you must agree to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan. Check the eligibility requirements.

What you can get

You can apply for:

loans
revolving credit facilities (including overdrafts)
invoice finance
asset finance

A lender can provide up to 25% of your annual turnover. The maximum amount you can borrow is £200 million.

How you can apply:

There are 12 lenders taking part in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

the amount you’d like to borrow
what the money is for
how long you’d like to pay it back

Supporting documents

You’ll need some supporting documents, some include:

management accounts
cash flow forecast
business plan
historic accounts
details of assets

The documents you need will depend on the lender. A loan could still be an option even if you do not have everything listed here.

The lender will check that the loan is:

for a suitable business purpose
affordable for you
the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance. Your business will be responsible for repaying 100% of the amount you borrow.

Feel like you’re ready to apply? Click here.

Apply for the Coronavirus Small Business Interruption Loan Scheme

The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

The scheme is open until 31 January 2021.

Eligibility

You can apply for a loan if your business:

is based in the UK
has an annual turnover of up to £45 million

You need to show that your business:

would be viable were it not for the pandemic
has been adversely impacted by the coronavirus

If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.

Who cannot apply

Businesses from any sector can apply, except:

banks, insurers and reinsurers (but not insurance brokers)
public-sector bodies
state-funded primary and secondary schools

How long the loan is for

The maximum length of the facility depends on the type of finance you apply for and will be:

up to 3 years for overdrafts and invoice finance facilities
up to 6 years, for loans and asset finance facilities

How to apply

There are over 50 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

the amount you’d like to borrow
what the money is for
how long you’d like to pay it back

Supporting documents

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

management accounts
cash flow forecast
business plan
historic accounts
details of assets

The documents required will vary from lender to lender and depend on how much you’re asking for. If you’re asking your existing lender for a small loan, the process may be automated and not require all of the documents.

The lender will check that the loan is:

for a suitable business purpose
affordable for you
the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

Furlough Scheme Extended

The Coronavirus Job Retention Scheme is extended until March 2021. Initially, the Job Support Scheme, which was due to begin on November 1st 2020, was set to take the Furlough scheme’s place, but has been “withdrawn” to allow businesses to gain financial support to retain their staff.

How to claim

If you are not availing of the Furlough Support Scheme, you can find out more information here.

Suppose you cannot maintain your workforce because your business operations have been affected by the coronavirus: in that case, you can apply for the furlough support scheme, and you can apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on leave.

You can now only claim if you have previously furloughed your employee before 30th of June 2020 and you have submitted a claim for this by the July 31st, 2020. Employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.

You can calculate how much you can claim from the government; however, there are some things you should know before you do.

Get the information you need on Furlough right here

What to do if you’re self-employed and getting less work or no work at all

Claim a grant if you’ve lost income

If you’re getting less work or no work because of coronavirus (COVID-19), you might be able to claim a grant through the Self-Employment Income Support Scheme.

Check if you can claim a grant through the Self-Employment Income Support Scheme.

Other financial support

You might be able to get a Test and Trace Support Payment, New Style Employment and Support Allowance (ESA), Universal Credit or Pension Credit.

Test and Trace Support Payment

Your local council might be able to give you £500 if:

you’ve been told to self-isolate
you live in England
you’re on a low income
you cannot work from home and will lose income as a result

Find out more or apply for a Test and Trace Support Payment.

New Style Employment and Support Allowance (ESA)

If you or your child has coronavirus, is self-isolating or shielding, you might be able to get New Style ESA. You can apply for it if:

you’re under State Pension age
you have made enough National Insurance contributions over the last 2 to 3 years

Your savings and partner’s income will not affect how much you get. You might be able to get Universal Credit at the same time as New Style ESA.

Find out more or apply for New Style ESA.

New Style Jobseeker’s Allowance (JSA)

If you were working as an employee within the last 2 to 3 years, you might be able to get New Style JSA. You can apply for it if:

you work less than 16 hours a week
you’re under State Pension age
you have made enough class 1 National Insurance contributions over the last 2 to 3 years, usually by working as an employee

Your savings and partner’s income will not affect how much you get. You might be able to get New Style JSA at the same time as Universal Credit.

Find out more or apply for New Style JSA.

Universal Credit

You could get Universal Credit if you have:

less than £16,000 in savings.
you or your partner is under State Pension age

If you’re already getting tax credits, they will stop when you or your partner applies for Universal Credit.

You might be able to get Universal Credit at the same time as New Style ESA or New Style JSA. Depending on your circumstances, Universal Credit can include additional amounts for things like rent or the costs of raising children.

Find out more or apply for Universal Credit.