DATED: 3 APRIL 2020
The Governement has set out a package of temporary, targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19. Details of these measures are given below.
For legal guidance on issues your business may be facing, please contact Chris Brightling, Head of Corporate & Commercial.
Corporate & Commercial
- Coronavirus Business Interruption Scheme
- Corporate Financing Facility
- Cash grants for retail, hospitality and leisure businesses
- Business rates holiday for retail, hospitality and leisure businesses
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Insolvency Law Amendment
- Covid-19 Support for Business
Coronavirus Business Interruption Scheme
The Coronavirus Business Interruption Loan Scheme offers loans of up to £5 million for SMEs through the British Business Bank.
The government will:
- make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
- provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
Is my business eligible?
Your business must be a UK-based in its business activity and have:
- an annual turnover of no more than £45 million
- a borrowing proposal which the lender:
- would consider viable, were it not for the COVID-19 pandemic
- believes will enable you to trade out of any short-term to medium-term difficulty
How does my business access the scheme?
The Coronavirus Business Interruption Loan Scheme (CBILS) is available for SMEs through accredited lenders across the UK.
Corporate Financing Facility
The Corporate Finance Facility is a new lending facility offered by the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans.
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This aims to:
- support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.
- support corporate finance markets overall and ease the supply of credit to all firms.
Is my business eligible?
All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.
How does my business access the scheme?
The scheme is now available for applications. information is available from the Bank of England.
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
For eligible businesses the grant offers:
- For businesses in these sectors with a property that has a rateable value of up to £15,000 a grant of £10,000.
- For businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.
Is my business eligible?
You are eligible for the grant if:
- your business is based in England
- your business is in the retail, hospitality or leisure sector
- your business has a rateable value of under £51,000
Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- as hotels, guest and boarding premises and self-catering accommodation
How does my business access the scheme?
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. www.kent.gov.uk
Business rates holiday for retail, hospitality and leisure businesses
A business rates holiday will be offered for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
Is my business eligible?
You are eligible for the business rates holiday if:
- your business is based in England
- your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- for hospitality, as hotels, guest & boarding premises or self-catering accommodation
More information on eligibility is set out in the government’s expanded retail discount guidance.
How does my business access the scheme?
You need to take no action. However, local authorities may have to reissue your bill to provide this support. They will do this as soon as possible.
You can estimate the business rate charge using the business rates calculator.
Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
Small Business Grant Scheme funding for local authorities will be offer by the government to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
Is my business eligible?
You are eligible if:
- your business is based in England
- you are a business that occupies property
- you are receiving small business rate relief or rural rate relief as of 11 March
How does my business access the scheme?
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.www.kent.gov.uk
Insolvency Law Amendment
An Insolvency Law Amendment was announced by the Business Secretary, Alok Sharma on 28 March which will make changes to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency.
This will also include:
- enabling companies to continue buying much-needed supplies, such as energy, raw materials or broadband, while attempting a rescue
- temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability.
Covid-19 Support for Business
For more information please visit:
For legal guidance on issues your business may be facing, please contact Chris Brightling, Head of Corporate & Commercial
Before relying on this commentary please read the Reliance on information posted section in our Terms of Website Use in our Legal section. Please note that specialist advice should be taken in relation to any specific queries and the information above is provided for general information purposes only.
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