During the Coronavirus crisis
There is no doubt that we are in challenging times for business owners, whether you are a sole-trader ‘one-man band’ or a larger company with a team of employees.
One thing that is common to all is the financial worry that is no doubt keeping you awake at night. So, it is really important that you know what financial support is available to you as a business, and that you know how to get hold of it. Here is a very simple summary of the financial help that has been made available, for various situations:
Do you have business premises (ie a shop, workshop, unit, office, salon etc) and are responsible for the business rates…
If yes, then you may be able to access either a £10,000 or £25,000 grant from the local council. If you get Small Business Rates Relief or Rural Rates Relief you may be eligible for the £10,000, and if you are in certain sectors, you may be eligible for up to £25,000. This money started to be paid out back in April, so apply straight away. This is a grant, not a loan, so does not need to be paid back ever.
Are you a sole-trader or in a simple partnership…
If yes, then you may be eligible for the Self-Employed Income Support Scheme, which will pay you 80% of your average monthly profit for three months, up to a maximum of £2500 per month. This scheme opened on 4th May, so again, apply as soon as possible if you have not already done so. You could get up to £7500. This is also a grant, not a loan, so does not need to be paid back. You can still be working as well as claiming this grant
Do you have employees, or employ yourself in your own limited company…
If yes, then you can temporarily ‘lay-off’ or ‘furlough’ employees whilst there is not enough work for them, including yourself, and the government will pay 80% of their wage for this period. This is open until the end of June, (at the time of writing, although changes are expected to be made to this scheme as lockdown rules change). So if you normally pay someone £1000 per month, the government will give you £800 of that cost, if they are furloughed for 1 month. You can choose to pay the remaining £200 or not, depending on your circumstances.
Could you do with more cash to help you survive the next few months and rebuild your business in the future…
If yes, then there are specially designed loans available from most banks now, that have been put in place to support businesses through the coronavirus. There are two options, depending on how much you need to borrow: The ‘Coronavirus Business Interruption Loan Scheme’ and the ‘Bounce Back Loan Scheme’. The Bounce Back Loan is limited to £50,000, but could be an excellent option for many businesses, as it is very cheap! There are no fees, no interest and no repayment charges for the first 12 months, and no repayment charges after that. The interest rate is only 2.5% from then on, so you are unlikely to ever find a cheaper loan. Many people are naturally reluctant to add any form of debt, but in these times, this loan really is worth considering, even if you take it out ‘just in case’ but don’t actually use it. If you pay it back within the first year, it will have cost you nothing.
With all of these schemes, there are certain rules around whether you can or can’t apply and what you can or can’t do once you have applied, so it is worth either checking out the details via the links supplied, or having a chat with an accountant who can help you out with it all.
The Numbers Business team is giving out loads of free help and advice at the moment, so pick up the phone or send an email if you think you could use some help.
by Kim Hume ACMA, CGMA, BA (Hons)
The Numbers Business, 18e Market Place, Malton, YO17 7LX
Tel: 01653 228961 or 07739 724536