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Coronavirus-related loans, grants and finance for businesses

Here we've summarised the various loans, grants and finance being made available to businesses affected by the pandemic.

Updated 1 September 2021

In addition to the points on this page, there are also various deferrals of tax payment deadlines and reliefs currently in place.  For a comprehensive list of support measures which have been introduced to support businesses in the current climate, see here.

What’s new on 1 September 2021 – see the relevant section below:

Grants

Coronavirus Job Retention Scheme  The Government payment has dropped to 60% (up to a cap of £1,875) for both August and September. The Scheme is due to close on 30 September 2021.

Self-Employed Income Support Scheme – The online claims system for the fifth grant covering May 2021 to September 2021 is now open.

Loans

Recovery Loan Scheme – A Recovery Loan Scheme is now available and will provide lenders with a Government guarantee of 80% on eligible loans between £25,000 and £10 million. The scheme is open to all businesses, including those that have already received support under the previous COVID-19 guaranteed loan schemes.  It aims to give continued support as previous schemes such as the Bounce Back Loan (BBL) and Coronavirus Business Interruption (CBIL) schemes have closed to applicants.

Grants

The Coronavirus Job Retention Scheme

On March 2021 the Government extended the Job Retention Scheme further until 30 September (it was previously due to end on 30 April 2021). It will run in full until the end of June 2021 and will then be phased out over the following 3 months.

The Job Retention Scheme since 1 November 2020

The Job Retention Scheme from 1 November 2020 – 30 June 2021 generally operated as its predecessor with businesses paid upfront to cover wages costs. The level of the grant has reverted to the amount available under the Scheme in August.

This means the Government paid 80% of wages up to a cap of £2,500. Employers paid employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee did not work.  

Under the Scheme’s arrangements:

The planned winding down of the Scheme

In the Chancellor’s Budget on 3 March 2021, it was announced that up to the end of June the current 80% government payment level was to be maintained (capped at £2,500 a month), with employers responsible for NICs and pension payments.

The government payment then dropped to 70% in July (up to a cap of £2,187.50) and to 60% in August and September for employees’ usual wages up to a cap of £1,875.  The Scheme is due to close on 30 September.

Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, employers will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above the 80% if they wish, but they are not required to do so.

Employers must also continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

Current Eligibility

The Job Retention Scheme remains open to all employers with a UK bank account and UK PAYE schemes. Neither the employer nor the employee needs to have previously used the Scheme.

The Government expects that publicly funded organisations will not use the Scheme, as has already been the case, but partially publicly funded organisations may be eligible where their private revenues have been disrupted.

Eligibility from 1 May 2021

For periods from 1‌‌ ‌May 2021 onwards, employers have been able to claim for eligible employees who were on employers’ PAYE payrolls on 2 March 2021. This meant they must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying HMRC of the earnings for that employee.

How and when to claim

Employers will need their Government Gateway user ID and password they received when they registered for PAYE online. If you do not finish your claim in one session, you can save a draft. You must, however, complete your claim within seven days of starting it.

All claims for periods from 1 July 2020 to 31 October 2020 had to be submitted by 30 November 2020.

Claims from 1 November 2020 have to be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day.  See this timetable published by the Government:

Claim for furlough days in:Claim must have been submitted by:
November 202014 December 2020
December 202014 January 2021
January 202115 February 2021
February 202115 March 2021
March 202114 April 2021
April 202114 May 2021
May 202114 June 2021
June 202114 July 2021
July 202116 August 2021
August 202114 September 2021
September 202114 October 2021

For the latest informtion on the Scheme see here

For information on how to claim, see here

Business and sector-specific grants

Note: The following grants may only apply to businesses in England, as they are connected to business rates.  Rates in Scotland, Wales and Northern Ireland are set by their devolved administrations.

Restart Grants

In his Budget on the 3 March 2021, the Chancellor announced the government will provide restart grants in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gyms.  The grants were launched on 1 April 2021 and eligible businesses can apply via their Local Authority.  For more information see here and  here.

Top up grants for businesses affected by the January 2021 national lockdown

On 5 January 2021, the Chancellor announced a grant support package to help businesses affected by the Govermnent’s national lockdown restrictions from 5 January 2021. This included:

These measures were in addition to the previously announced discretionary grant funding for Local Authorities and the Local Restriction Support Grants worth up to £3,000 a month.

The one-off top-ups were granted to closed businesses as follows:

These sums relate to businesses in England, however the devolved administrations received additional funding to also provide similar support measures.  

The grants are distributed via Local Authorities, see here and here.  The application closing dates for the different grant payment cycles are as follows:

Grant schemeApplication deadline
National lockdown: 5 January 2021 (first payment cycle – 5 January to 15 February)31 March 2021
National lockdown: 5 January 2021 (second payment cycle – 16 February to 31 March 2021)31 May 2021

Local Restrictions Support Grant Schemes 

After November’s lock-down the Government announced 3 grant schemes for those businesses affected by the Coronavirus restrictions. 

The grants from these schemes were distributed by Local Authorities.  The closing date for applications to these grant schemes has now passed.

Hospitality Sector

A Christmas Support Payment was instigated by the Government for wet-led pubs (those that predominantly serve alcohol rather than provide food) and have been severely impacted over the festive season due to temporary local restrictions. Eligible businesses were entitled to a one-off cash grant of £1,000 from their local council in areas under Tier 2 or Tier 3 local restrictions.  For more information and eligibility criteria see here. Note: The closing deadline for applications for this Christmas Support Payment has now passed.

Job creation grants

On 8 July 2020, the Chancellor’s Summer Statement included a number of grants designed to encourage job creation and protection – particularly for young people.

Kickstart Scheme

The Kickstart Scheme was created to provide high quality six-month work placements for those aged 16-24, who are on Universal Credit and considered to be at risk of long-term unemployment. 

Government funding for each job covers 100% of the relevant National Minimum Wage for 25 hours a week plus the associated employer NICs and employer minimum automatic enrolment contributions (a maximum of about £6,500). See more information here.

There is also £1,500 per job placement available for setup costs, support and training.

Funding is available following a successful application process. Previously, employers could only apply directly for a minimum of 30 job placements. Smaller organisations had to partner with other organisations to reach the minimum number and organisations, like Chambers of Commerces, co-ordinated partnerships to help these businesses utilise the scheme.

From 3 February 2021 the system changed, with the Government removing the minimum requirement of 30 vacancies for businesses to apply directly. To ensure all job placements continue to be of a high quality, the Government will apply rigorous checks on training support and finances.  See here

Employers can also choose to apply through a Kickstart gateway, including those supporting sole traders.  Kickstart gateways already working with the scheme can continue to add more employers and job placements to their grant agreement.

Information about applying for the grant can be found here.

Traineeships

Employers who provide work experience for 16-24-year-olds in work placements and training will receive a payment of £1,000 per trainee. Provision of traineeships and eligibility for them will be extended to those with Level 3 qualifications and below, to ensure that more young people have access to training.  For more information see here.

Payments for employers who hire new apprentices

From 1 August 2020 to 31 March 2021, employers in England are able to apply for a payment of £2,000 for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over. 

These payments are in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices, and any of those aged under 25 with an Education, Health and Care Plan. For more information see here.

Note: Employers who want to apply for the £2000 payment had to have applied by 30 April 2021

In his Budget on 3 March 2021, the Chancellor indicated the government will pay an employer who hires a new apprentice between 1 April 2021 until 30 September a higher payment of  £3,000.  The payment is applicable for apprentices of all ages. More detail on the higher payment and claims process has yet to be released.

The Self-Employed Income Support Scheme

In Autumn 2020 the Chancellor announced the SEISS was to be extended from 1 November 2020, in the form of two new grants (known as the third and fourth grants, given the previous two already distributed since Spring 2020). Both the third and fourth grants would be available for three month periods covering:

The Government’s third taxable grant covered 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500. Note the closing date for claims of the third SEISS grant was 29 January 2021. 

The grant had been increased from the previously announced level of 40% of trading profits to 80% of trading profits, for 1 November 2020 to 31 January 2021.

In his Budget on 3 March 2021, the Chancellor announced that the SEISS will continue until September with a fourth and fifth grant.

The fourth and fifth grants take into account submitted 2019-20 tax returns. This means the self-employed may be able to claim, even if they were not eligible for previous grants. To qualify they must have submitted their 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.  They must also have traded in the 2020-21 tax year.

The fourth SEISS grant 

The closing date for the fourth grant has now passed (1 June 2021).  With the fourth grant, the Government paid a taxable grant which was calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. 

The value of the grant was based on an average of the self-employed person’s trading profits for up to four tax years between 2016 to 2020, where available.

As with previous grants, trading profits couldn’t be more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.

Eligibility for the fourth SEISS grant also depended on if you had experienced a significant financial impact from coronavirus between February 2021 and April 2021.

As the calculation took into account the tax year 2019-20, if you previously claimed SEISS grants you could receive grants that were higher or lower in value than any previous SEISS payments received.

The online claims service for the fourth grant has now closed (1 June 2021)

The fifth SEISS grant

The fifth and final SEISS grant covers May to September 2021. The amount of the fifth grant will be determined by how much a self-employed business’ turnover has been reduced.

The grant is taxable and will be paid out in a single instalment. Detailed guidance for claiming the grant can be found here.

The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant will be worth 30% of three months average trading profits and capped at £2,850.

To qualify for the grant applicants must:

Note: HMRC will first look at your 2019 to 2020 Self Assessment tax return and your trading profits must be no more than £50,000 and at least equal to your non-trading income. If you’re not eligible based on your 2019 to 2020 tax return, they will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

To help your claim:

Applicants must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.  HMRC expects applicants to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.  It is investigating and clamping down on assessments and applications which it regards as false or fraudulent. For more detail see here.

Other points to bear in mind

The online application system for the fifth grant is now open. See here.

As was the case with the previous grants, a self-employed person’s accountant, tax agent or adviser cannot make the grant claim on their behalf. A self-employed person must make the claim themself. Do get in touch with your Shipleys contact for advice ahead of making the submission.

Note: The grants are subject to income tax and National Insurance contributions, but do not need to be repaid. Recipients are warned to be mindful of when the tax is due on the various grants – see this article.

For the latest information on the SEISS, see here

If people have only just started out as a self-employed person and haven’t completed a tax return yet, they will not be able to benefit from the Scheme and are directed to make use of the new welfare arrangements, such as Universal Credit. See here

Loans and finance

In December the Chancellor announced that the closing date for the Government’s three Coronavirus business interruption loan schemes would be extended further to 31 March 2021. This extended the previously scheduled closing date of 31 January 2021.  See here

From 6 April 2021, eligible businesses can access a new Recovery Loan Scheme – even if they had taken out a loan under the previous Coronavirus business interruption loan schemes.

The Recovery Loan Scheme

A new recovery loan scheme launched on 6 April and will remain open until 31 December 2021, subject to review. It gives businesses of all sizes access to loans and other kinds of finance from £25,000 to £10 million per business.  The government will guarantee 80% of the finance to the lender and, once received, the finance can be used by the businesss for any legitimate business purpose, including growth and investment.

Loans are available through a network of accredited lenders, listed on the British Business Bank’s website – see here.

Eligibility

Eligible businesses need to be trading in the UK and show that: 

Business that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this scheme if they meet all other eligibility criteria. Businesses from any sector can apply, except:

Finance options available

Businesses can borrow:

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.  For businesses borrowing more than £250,000 the lender has the discretion to decide whether to take personal guarantees. However the maximum amount that can be covered under Reovery Loan Scheme (RLS) is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied

The time limit for the loans is:

To apply

Accedited lenders are published on the British Business Bank website – see here. We can also introduce you to accredited lenders, and please talk with your usual Shipleys contact.

The Future Fund

The £500 million Future Fund was delivered in partnership with the British Business Bank. It provided UK-based companies with between £125,000 and £5 million from the Government, with private investors at least matching the Government commitment. The loans automatically converted into equity on the company’s next qualifying funding round, or at the end of the loan if they were not repaid.  The Future Fund closed to applications on 31 January 2021.

Sustainable Innovation Fund

On 27 June the Government announced a new Sustainable Innovation Fund. This £200m fund from the Government was open to companies across the UK who needed urgent financial support to keep their cutting-edge projects and ideas alive. See here.

This funding, delivered through Innovate UK, formed part of the wider £750 million package of grants and loans announced in April 2020 to support innovative firms. The application deadline has now closed.  For the latest Business Innovation funding opportunities and the application process, see here.

Previous Government-backed Business Interruption Loans

Previous Government-backed loan support for businesses were delivered through four routes.  All these loan schemes have now closed to new applicants

Support for Exporters

The Government has released guidance for UK businesses trading internationally.  See more here

In particular, financial support is available through UK Export Finance (UKEF).  This organisation works with banks and insurance brokers to help companies of all sizes fulfil and get paid for export contracts. It provides guarantees, loans and insurance on behalf of the Government that can protect UK exporters facing delayed payments or transit restrictions.

Help from UKEF includes:

To find out if UKEF covers your region, email customer.service@ukexportfinance.gov.uk

Other financing measures

In addition to the Government support, other lenders are initiating financing options to help businesses in areas such as spreading the cost of equipment purchases, short-term loans, finance against unpaid loans etc. 

Capitalise

One particular resource we recommend is Capitalise.  This is a a platform where businesses can find, compare and select the right lender in a matter of minutes. As well as finding lenders who specialise in your industry, you’ll also find lenders most likely to give you an offer. 

Captilalise cover finance for a wide range of areas including asset finance (funding for any asset), invoice finance (using your invoices to get funding), merchant cash advance (using your credit card transactions to get funding), trade finance (paying for goods based on an order), working capital loans (to finance everyday operations) and property finance (to gain access to bridging loans, development and commercial finance).

Also talk to one of our team for introductions to other providers of finance.

Summary and can we help?

We will continue to monitor the announcements from the Government and update this page as new grants and funding sources emerge.  In the meantime, please do get in touch with your usual Shipleys’ contact if you need any further advice or call one of our offices.

London: +44 (0)20 7312 0000  or email advice@shipleys.com

Godalming: +44 (0)1483 423607 or email godalming@shipleys.com

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.

Copyright © Shipleys LLP 2021

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