20 Apr 2020

COVID-19 Business Support

Matt Symonds

The COVID-19 outbreak is having an economic impact and with this, Government support is being implemented to help businesses.

We’re working internally to look at how we can support our clients during these uncertain times, and the following are just some of the initiatives currently available to businesses.

Covid Corporate Financing Facility (CCFF)

HM Treasury and the Bank of England are coordinating closely in order to ensure that our initiatives are complementary and that they will, collectively, have maximum impact, consistent with the Bank and HM Treasury’s independent responsibilities.

Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for working capital from companies.

The CCFF will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy.  It will help businesses across a range of sectors to pay wages and suppliers, even while experiencing severe disruption to cashflows.

The facility will offer financing on terms comparable to those prevailing in markets in the period before the Covid-19 economic shock, and will be open to firms that can demonstrate they were in sound financial health prior to the shock.  The facility will look through temporary impacts on firms’ balance sheets and cash flows by basing eligibility on firms’ credit ratings prior to the Covid-19 shock. Businesses do not need to have previously issued commercial paper in order to participate.

The scheme will operate for at least 12 months and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

By providing an alternative source of finance for a wide range of companies, the scheme will help to preserve the capacity of the banking system to lend to other companies, including small and medium-sized enterprises, which rely on banks.

This information has been taken from the Bank of England website – the original article and more information on the CCFF can be found by clicking here.

Coronavirus Business Interruption Loan Scheme (CBILS)

At Budget 2020 on Wednesday 11 March, the Chancellor announced a ‘Coronavirus Business Interruption Loan Scheme’, and that it would become available ‘over the coming weeks’.

This has been brought forward, and the new scheme is now expected to become available in week commencing 23 March 2020.

As well as loans, there are many other types of finance supported by the programme, depending on the provider.

It will be provided by the British Business Bank through participating providers, and will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. NB – the borrower always remains 100% liable for the debt.

The Government will also cover the first 6 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million pounds (the original announcement suggested a maximum value of £1.2 million.)

CBILS support a wide range of business finance products, including:

  • Term facilities
  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities

To be eligible for support via CBILS, the small business must:

  • Be UK based, with turnover of no more than £41 million per annum
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
  • Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements
  • Full eligibility criteria will be published shortly

Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.

This information has been taken from the British Business Bank website – the original article and more information on the CBILS can be found by clicking here.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides financial support to mid-sized and larger UK businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Specifically, it facilitates access to finance for businesses with a turnover above £45 million, the upper limit for the existing smaller-business focused Coronavirus Business Interruption Loan Scheme (CBILS).

CLBILS will be available through a range of British Business Bank accredited lenders and partners, which will be listed on the British Business Bank website.

A lender can provide:

  • up to £25 million to businesses with turnover from £45 million up to £250 million
  • up to £50 million to businesses for those with a turnover of over £250 million

Finance is available in the form of:

  • term loans
  • revolving credit facilities (including overdrafts)
  • invoice finance
  • asset finance

Original Source of information – British Business Bank

Billion pound support package for innovative firms

  • Chancellor announces new £1.25 billion coronavirus package to protect firms driving innovation in UK
  • package includes a £500 million investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector
  • SMEs focusing on research and development will also benefit from £750 million of grants and loans

Future Fund – launching in May

£500 million investment fund

“Provides businesses with between £125,000 and £5 million from the government, with private investors at least matching the government commitment. These loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid. To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years.”

£750m Grants & Loans

“Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.”

Find full article from Gov.uk by clicking here.

Readiness to supply ventilators and ventilator components

The Department for Business, Energy and Industrial Strategy is looking for organisations who can support in the supply of ventilators and ventilator components across the United Kingdom as part of the Government’s response to COVID-19. These questions aim to identify the suitability and readiness of organisations to be involved in the initiative.

Any businesses able to assist with this, are asked to register their details with BEIS here.

R&D Tax Relief

If your company (it has to be limited and eligible to pay UK corporation tax if it were profitable) has been involved in technical projects of any kind, there is a strong chance that HMRC’s R&D Tax Credit Scheme could benefit your company.

HMRC allow you to look at the two previous tax years plus the one you are in. If you have paid tax for either of the two previous tax years, you should be able to reclaim a chunk of this – that’s money straight in to your cash flow in, typically, 8 weeks.

Contact us for more information.

Local Authorities

Local authorities are a great first port of call for any UK business looking for information and support such as grants and finance options during this pandemic. You can contact your Local Enterprise Partnership (LEP) and often the Growth Hub.

The both the LEPs and Growth Hubs will have online support available, as well as advisors to talk to.  For example, the local LEP and Growth Hub to TBAT is D2N2 and below are some examples of their support:

  • Government support e.g. job retention scheme, self-employment income support scheme
  • Re-deployment Triage Service – matching those made redundant with new work in other sectors
  • Business rate relief
  • List of other resource organisations (from well-being to COVID)
  • Local Authorities support in the area

Use this link to find your local LEP

You can also consider contacting your local Chamber of Commerce, as these are organisations that will find out what is available locally and nationally that could support businesses. They also provide links to local and national support.

Use this link to find your local Chamber of Commerce

Hubs for donating PPE to the NHS

Some companies locally are acting as hubs for other companies donating PPE to coordinate donations to the NHS. Ultimately these are coordinated through the Local Resilience Forums (LRFs), in place under The Civil Contingencies Act (2004) (CCA).

The purpose of the 42 LRFs under the CCA is emergency preparedness to collectively plan, prepare and communicate in a multi-agency environment. In some areas these are arranged at drop-off points, maintaining social distancing. Specifically, items being sought are FFP2 and FFP3 rated face masks, nitrile gloves, visors or goggles and disposable aprons or overalls. Many local hospitals have also published contact details for donating PPE.

Find out more about the Local Resilence Forums using this link.

Useful Links

We’ve also gathered together a handful of links to reliable sources, which you can use to keep up-to-date with the business support measures being put into place:

Chancellors Speech 17th March 2020

Visit Britain Latest Information for Businesses

Gov.uk’s COVID-19 Support for Businesses

Government business support

Offer Coronavirus support from your business

Government ‘Coronavirus Business Financial Support’ finder

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