Grants and Funding for Small Businesses During the Pandemic and Beyond
Written by Hannen Beith
Senior Corporate & Commercial Consultant Solicitor
Small and Medium sized Enterprises (“SMEs”) are the backbone of the economy. The Government recognises this and provides funding and assistance in various forms to ensure their growth and continuity. The Coronavirus pandemic has already generated help for e.g. Employers and Employees in the form of the “Furlough” scheme. Here are some of the other schemes we can help you to apply for.
1 The Bounce Back Loan Scheme (BBLS) enables smaller businesses to access finance more quickly during the coronavirus outbreak. The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
The length of the loan is 6 years, but you can repay early without paying a fee. There are 11 lenders participating in the scheme including many of the main retail banks. You can apply to any of them. Some are turning around applications more quickly than others, so ask us for advice about this. If one lender turns you down you can apply to another.
2 The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses affected by coronavirus (COVID-19).
The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.
The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.
There are over 50 lenders participating in the scheme including all the main retail banks. You’ll need to provide documents that show you can afford to repay the loan.
These may include:
- management accounts
- cash flow forecast
- business plan
- historic accounts
- details of assets
The documents required will vary from lender to lender and depend on how much you’re asking for.
3 The Coronavirus Future Fund
This scheme will issue convertible loans between £125,000 to £5 million to innovative companies which are facing funding difficulties due to the coronavirus outbreak.
4 The Coronavirus Local Authority Discretionary Grants Fund
The Discretionary Grant Fund supports small and micro businesses that are not eligible for other grant schemes. Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme. You can get a grant of £25,000, £10,000 or any amount under £10,000.
5 More Grants (no need to pay back – these are not loans)
Hot of the press! The Government announced on 30 July 2020 that thousands of smaller businesses in England are set to benefit from £20 million of new government funding to help them recover from the effects of the coronavirus pandemic.
Small and medium sized businesses will have access to grants of between £1,000 – £5,000 to help them access new technology and other equipment as well as professional, legal, financial or other advice to help them get back on track.
We at Greystone Solicitors have the knowledge and expertise to help and advise you to access the most appropriate loans and grants for your business. There are many which are not Coronavirus related, and which existed before the pandemic and which will be around in some shape or form once we all adjust to the “new normal”, or some clever scientist finds a vaccine!
