Coronavirus update: Support for businesses

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Businesses will be able to access government support from today (23 March) to keep operating in the face of the global economic emergency brought on by coronavirus

The chancellor has set out a package of temporary and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

The package of measures to support businesses includes:

  • A Coronavirus Job Retention Scheme
  • Deferring VAT and Income Tax payments
  • A Statutory Sick Pay relief package for small and medium-sized businesses (SMEs)
  • A 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
  • Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • The Coronavirus Business Interruption Loan Scheme offering loans of up to £5m for SMEs through the British Business Bank
  • A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • The HMRC Time To Pay Scheme.

The Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

The Coronavirus Business Interruption Loan Scheme

For small and medium-sized businesses, the new Coronavirus Business Interruption Loan Scheme is now available for applications. This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5m. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.

The government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.

The Covid Corporate Financing Facility

The Bank of England’s new lending facility for larger firms – the Covid Corporate Financing Facility – will also be open for applications to participate from this morning. By purchasing short-term corporate debt – known as commercial paper – the scheme provides a quick and cost-effective way to raise working capital for companies who are fundamentally strong but are experiencing severe disruption to cashflows, helping businesses across a range of sectors to pay wages and suppliers.

The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.

Government information campaign

A government information campaign has also launched today to ensure businesses are aware of the support available to them and how to access it. In addition to a new central website, the campaign will use media channels including radio, social media and television to reach businesses eligible for help.

The Chancellor of the Exchequer, Rishi Sunak, said: “We are working round the clock to do whatever it takes to protect our people and businesses. That means that we are not only taking unprecedented action but doing so at unprecedented speed, because we know that businesses and their employees need help now.”

Business Secretary, Alok Sharma, commented: “We know that businesses are in urgent need of access to funding during these unprecedented times. The Business Interruption Scheme will make it easier for banks to lend and businesses to borrow. This will ensure that credit keeps flowing to where it is needed, when it is needed.”

Bank of England Governor, Andrew Bailey, added: “The Bank of England has taken a number of steps in recent weeks to support the UK economy through the economic shock caused by covid-19.

“On Monday a new lending scheme, the Covid Corporate Financing Facility, will open to help businesses manage through this period of uncertainty. Combined with steps taken by the Government, this will help companies through this difficult time and support the needs of the people of this country.”

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