The far-reaching effects of COVID-19 could result in the worst crisis that the UK economy has faced in generations. It is still early days, but all the signs point towards the damage to the nation’s businesses, jobs and over prosperity being worse than even the global financial crisis of 2008.
It’s an incredibly worrying time for all business, but perhaps more so for SMEs. I wouldn’t blame you for finding the “we’re all in this together” motto a little hollow when you might feel isolated and anxious about the future.
But I’d like to give you a reassurance that you are not alone. In response to the ongoing coronavirus situation, I have been asked by the partners of Hall Morrice to act as a source of information and support to clients that might be struggling to make sense of it all and need some financial guidance.
While I don’t have all the answers, especially because the situation and the measures being implemented by the government change and evolve so rapidly, I will do my best to help guide you and your business through these very turbulent times.
This week, further to the Chancellor’s Budget announcement, sees the launch of the Coronavirus Business Interruption Loan Scheme (CBILS) which will be provided by the British Business Bank through a network of over 40 lenders.
The scheme provides the lender with a government-backed 80% guarantee against the outstanding facility balance, which means that a business that might otherwise have found themselves turned down for a loan could instead be accepted. It’s important to note, however, that the borrower will be 100% liable for the debt.
In an effort to help businesses with cash flow during this time, the government will also cover the first twelve months of interest payments, with the borrower responsible for repayments of the capital. Loans of up to £5m will be made available.
The loans are available to help businesses in the short and long term, with options for repayment plans ranging from three months up to 6 years.
It may also be worth checking with your own bank or lender about any support that they might have available for firms that are affected by the fall-out from COVID-19. Some have set up their own funds to help companies struggling with cashflow and so on, although as with every loan facility, each application will be assessed on its merits.
While the CBILS is an initiative from Westminster, the Scottish Government has also announced measures to help see firms through the crisis, including business rates relief. An overall £2.2bn package will include small firms in receipt of the small business bonus or rural relief being eligible for a £10,000 grant and companies operating in the hospitality, leisure or retail sector getting 12 months of 100% relief.
HM Revenue & Customs have also been quick to respond with additional support and are sympathetic to the financial hardships that could result for so many people as a result of COVID-19.
HMRC has launched additional phone lines to cope with the influx of enquiries and has expressed willingness to be flexible. (HMRC helpline – 0800 015 9559) Communication is key here – if you talk to HMRC and explain your situation, there could various forms of help available, including payment plans that spread instalments evenly throughout the year to help with cash flow management. If you have specific concerns about your tax liabilities, remember that Hall Morrice has a dedicated tax team that can also provide support.
It’s important to keep checking in with official sources and any trade organisations that you might be a member of to keep abreast of any changes that might impact on your specific sector, and I will do my best to keep you updated too.
The recent announcement of the Coronavirus Job Retention Scheme will allow all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during the crisis. HMRC are currently working on a new portal to facilitate this scheme with full details to be announced.
The UK Government has also produced an excellent summary of advice available to businesses through these difficult times. I will be happy to help with any queries going forward.
These are unprecedented times and we are in a situation that we are learning how to adjust to on a day-to-day basis. But we have to think positively: I’m sure there were times during the financial crisis that we thought we would never come out the other side. Yet here we are.
If I can provide you with any guidance at all on how COVID-19 will affect your finances, please do not hesitate to get in touch with me at firstname.lastname@example.org
Business Development Director