Financial support advice and FAQs
The UK government has introduced a number of financial support measures for businesses during the coronavirus crisis, including the coronavirus job retention scheme and the business interruption loan scheme which seeks to supports small and medium-sized businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.
Other schemes include business rate relief and business grants which, for businesses in Cheltenham, are being administered by Cheltenham Borough Council.
FAQs and advice
Why is my bank not offering the business interruption loan scheme?
Please clarify with your preferred bank or finance provider whether they are participating in this coronavirus business interruption scheme. To offer this scheme, the finance provider must be accredited by the government-owned British Business Bank.
The priority for the British Business Bank has been to get the coronavirus business interruption loan scheme up and running, delivering urgently-needed finance to the UK’s smaller businesses as soon as possible. To achieve that, the Bank has worked with the already established infrastructure and the 40+ existing accredited lenders to make this operational in under two weeks. Existing lenders range from high-street banks to challenger banks, asset-based lenders and specialist local lenders.
Now that the scheme has successfully launched, accrediting new partners is a top priority. The British Business Bank has put in place substantial additional resource to assist with processing applications from new lenders as quickly as possible.
The scheme went live on Monday 23 March, so businesses are able to speak to lenders now and apply for facilities. Businesses should check on the British Business Bank’s website to find out which lenders are able to provide the type of finance they are looking for. Not every accredited lender can provide every type of finance listed.
Update 3 April 2020
In response to feedback received since the schemes launch, the Chancellor is taking further action by extending the scheme so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible. This change is designed to enable all long-term viable businesses experiencing difficulties as a result of the coronavirus outbreak to access finance.
Update 4 May 2020
Open for applications from 4 May, the Bounce Back Loan Scheme provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak and that can benefit from £50,000 or less in finance. Find out more on the British Business Bank website, including:
Please note: This scheme is not administered by Cheltenham Borough Council.
What if my annual turnover is more than £45m?
On 3 April 2020, the Chancellor announced that the Coronavirus Large Business Interruption Loan Scheme (CLBILS) will now ensure that more firms are able to benefit from government-backed support during this difficult time. It will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. This will give banks the confidence to lend to more businesses which are impacted by coronavirus but which they would not lend to without CLBILS. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.
Are self-employed individuals eligible under the scheme?
The Scheme is available to self-employed individuals with an eligible business entity. This includes sole traders, freelancers, bodies corporate, limited partnerships, limited liability partnerships or any other legal entity carrying out a business activity in the United Kingdom, with a turnover of less than £45m, operating in most sectors. The turnover of the business must generate more than 50% of its turnover from trading activity.
Whether or not a business is liable for business rates, or occupies business premises, is not a consideration under the scheme.
Will this scheme help me to negotiate forbearance on my existing loans?
This scheme is designed to support lenders providing new finance facilities, and is not designed to change the terms of existing loans, or support lender forbearance.
The scheme may provide an option to refinance the existing facility. This is at the discretion of the lender, and any applicant will also need to fulfil the new scheme’s eligibility criteria.
If you are worried about your ability to repay existing finance facilities, you should speak to your usual lender. Businesses will remain responsible for repaying any facility they may take out under the new scheme.
What about the High Street banks?
The Big Four banks have agreed that they will not take personal guarantees as security for lending below £250,000. For facilities above £250,000, it must establish that the borrower is unable to provide security, before it uses CBILS.
Primary residential property cannot be taken as security under the scheme.
Lloyds Bank have made £2bn of arrangement fee free finance available to support small businesses up to £25m turnover in size. Finance is available to support ongoing cashflow needs, caused by interruptions to supply chains or due to high staff absences
Natwest have a package of support for SMEs throughout the UK, with help across all sectors and where there is the greatest disruption and need. The SME support includes following components:
- An additional £5bn of support to the Fund focused on the provision of working capital support that meets the needs of SMEs
- Loan repayment holidays
- Temporary emergency loans with no fees
What alternative sources of finance are there?
If you are seeking finance from banks and cannot find a suitable lender, there are three online finance platforms designated by government that can seek out suitable providers. Further information is available on the British Business Bank website.
Can I get help with tax and VAT?
Support is available for businesses through deferring VAT and income tax payments. HMRC will support businesses by deferring valued added tax (VAT) payments for 3 months. If you’re self-employed, income tax payments due in July 2020 under the self-assessment system will be deferred to January 2021.
Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.
Businesses do not need to inform HMRC if they wish to defer payment. They can opt in to the deferral simply by not making VAT payments due in this period.
Businesses have until 31 March 2021 to pay any VAT deferred as a result of this announcement.
Should they wish, businesses can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. Businesses must continue to submit VAT returns as normal.
For more information please go to GOV.UK and search “Deferral of VAT payment”.
If you’re concerned about being able to pay your tax as a result of COVID-19 then call HMRC Helpline on 08000 241222.
What other advice or help is available to maintain business continuity?
Talk to your existing finance provider to see what they can do to help you manage existing debt. If you have an existing loan or asset purchase (for example a lease or HP agreement), you could ask for a repayment holiday. You may also need a new or increased overdraft facility or to secure additional finance.
Talk to your customers, especially large customers, and ask if they can pay your invoices more quickly. Some firms have already started doing this.
Discuss preparations with your clients now.
Check your contractual obligations for example whether there includes unforeseeable circumstances that prevent you from fulfilling your contract.
Check to see what health or income protection insurance you might have in place.
GOV.UK provides advice on business continuity management, including a business continuity management toolkit to help you identify all the issues you need to consider and how to make your own arrangements to manage business interruption.
Will my business insurance provide cover for business interruption?
The vast majority of business interruption insurance policies held by small or medium-sized enterprises (SME) will not include cover for business losses caused by a pandemic, as it will be listed as an exclusion. Many policies will also require there to be a case of COVID-19 confirmed on the premises.
The Association of British Insurers (ABI) has published a Q&A in relation to business insurance and COVID-19:
Do I still have to file my company accounts at Companies House?
Companies can apply (under section 442 of the Companies Act) for an extension to file their accounts with Companies House. Companies House is automatically allowing three-month extensions if companies cite CV-19 as a reason for late filing.
Companies that have already extended their filing deadline, or shortened their accounting reference period, may not be eligible for an extension.
Can I get help with my domestic mortgage?
To support customers, whether they are impacted directly or indirectly by the coronavirus (COVID 19), mortgage lenders will offer a three-month payment holiday for those customers that are experiencing issues with their finances as a result of Covid-19. Lenders across the industry have agreed to introduce a simpler notification process for residential customers to apply for this relief.
Contact your mortgage provider to enquire whether you can take a mortgage holiday.
Where can I get further advice about international trade and exports?
For all enquiries concerning international trade or exports, including (but not limited to):
- Problems getting supplies into the UK
- How to access export finance
- Advice on freight forwarding
- Customs clearance
- Warehousing capacity
- Export documentation
Find further information on the governemnt website, including contact details for the Deptartment for International Trade (DIT) services.
I am an apprentice - what support is there?
Guidance has been produced for apprentices, employers, training providers, end-point assessment organisations and external quality assurance providers in response to the impact of coronavirus (COVID-19).
As part of the cross-government efforts to respond to the impact of COVID-19, the Education and Skills Funding Agency (ESFA) is implementing new measures, for the duration of the pandemic, to make it easier for apprenticeships to continue and complete in a different way, if they need to or to break and resume an apprenticeship later when that becomes possible.
The document sets out guidance, and some temporary flexibilities that are being introduced to the programme during the pandemic. It provides answers to questions related to these changes, and other common questions.