Financial Help for SMEs during COVID-19

Share Article
Financial Help for SMEs during COVID-19

As a business owner you’re undoubtedly aware of the drastic financial impact of COVID-19 on many vocations across the UK. But how can you get help in staying afloat during the pandemic? We’ve navigated the minefield of information available and simplified it so you can quickly check for loans, grants, and other funding specifically available to small and medium businesses in the UK.

The Bounce Back Loan Scheme (BBLS)

Who is it for? UK-based SMEs founded before 1st March 2020 that are adversely impacted by COVID-19. All sectors are eligible, except for banks, insurers, reinsurers, public-sector bodies, and state-funded primary and secondary schools.

How much is it worth? Borrow between £2,000 and up to 25% of your annual turnover, with a maximum of £50,000. The government guarantees 100% of the loan with no repayments, fees or interest for the first year. The loan length is 6 years but can be repaid early with no fee, but the interest rate after the first 12 months is 2.5%.

How do I apply?

•11 lenders are taking part, including most main retail banks.

•Approach a lender yourself through their website.

•Complete a short online application form and self-declare that you are eligible.

•The lender then decides whether to offer a loan or alternative type of finance.

•You cannot apply if you are already claiming the Coronavirus Business Interruption Loan (CBILS, see below), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), or the COVID-19 Corporate Financing Facility.

•Learn more and find a lender here.

The Coronavirus Business Interruption Loan Scheme (CBILS)

Who is it for? Small and medium-sized UK businesses with an annual turnover no greater than £45 million. All sectors are included, except for banks, insurers, reinsurers, public-sector bodies, and state-funded primary and secondary schools.

How much is it worth? Loans and other finance up to £5 million. The term is up to 3 years for overdrafts and invoice finance facilities, or up to 6 years for loans and asset finance facilities. The government guarantees 80% of the finance to the lender, also paying interest and fees for the first year.

How do I apply?

•Over 50 lenders are available, including all main retail banks.

•Tell the lender how much you’d like to borrow, what the money is for, and how long you need to pay it back.

•Provide supporting documents.

•Find out more and search for a lender here.

The Coronavirus Future Fund

Who is it for? UK companies incorporated before 2020 that have raised at least £250,000 in equity investment over the past 5 years. Ideal for businesses who cannot access other government support due to being pre-revenue or pre-profit. Trading restrictions, employee and revenue requirements apply, so check here for the full conditions.

How much is it worth? Convertible loans from £125,000 up to £5 million, with a minimum 8% interest per annum (non-compounding).

How do I apply?

•An investor must apply in connection with an eligible company, and The Future Fund will match 100% of the amount provided by investors.

•The Fund is open until the end of September 2020.

•The scheme is delivered by the British Business Bank and applications are made via the Fund's website.

Small Business Grant Fund (SBGF)

Who is it for? Small businesses in England which occupy property and pay little or no business rates.

How much is it worth? £10,000 one-off cash grant that is non-repayable but taxable.

How do I apply? Eligible businesses will automatically be contacted by their local council with the next steps.

Retail, Hospitality and Leisure Grant Fund (RHLGF)

Who is it for? Retail, hospitality, and leisure businesses based in England, with a rateable value under £51,000 as of 11th March 2020.

How much is it worth? Grants depend on the rateable value but range from £10,000 to £25,000. They are non-repayable but taxable.

How do I apply? Eligible businesses will be contacted by their local council with further information.

Local Authority Discretionary Grants Fund

Who is it for? England-based businesses with ongoing high property costs, and with a rateable value or annual mortgage/rent payment below £51,000. Businesses must have suffered from a significant income drop due to coronavirus.

How much is it worth? A non-repayable but taxable grant of £25,000, £10,000, or any amount under £10,000.

How do I apply?

•Businesses cannot apply if they are already claiming from another government grant scheme.

•Application details are available from your local council's website.

Other Government Help Available:

•Claim for 80% of your furloughed employees’ wages and employer NI and pension contributions.

•Claim back Statutory Sick Pay paid to employees due to COVID-19.

•Business rates relief for retail, hospitality and leisure businesses.

•Deferral of VAT payments.

If you’re still unsure of which support is available to you, use the government’s handy tool to quickly check your eligibility for every type of financial aid on offer.

Photo by Ketut Subiyanto.