OVID-19 ON BUSINESS CONTINUITY
Financial Support to mitigate the effects of Coronavirus
The Government has put in place further measures to deal with the financial impact of COVID-19.
1. SMALL AND MEDIUM SIZED BUSINESSES
The level of borrowing guarantees for SMEs has been increased to £5 million. In addition there will be an interest “holiday” for the first six months of any loan a business takes out as a result of the impact of the Coronavirus. Loans can be provided by any accredited lender which includes most banks.
2. LARGE FIRMS
Whilst not normally eligible for assistance, the Bank of England will launch a major new scheme (probably on Monday 23rd March) to provide bridging loans to large businesses whose cash flow may be impacted by Coronavirus. The scheme will be directly administered by the Bank of England.
3. RETAIL AND LEISURE
The sector which has seen the first impact of the Coronavirus will be eligible for grants of up to £25,000 in addition to rate relief and access to the Coronavirus Business Interruption Loan Scheme. The grants will be administered by Local Authorities.
4. MORTGAGE HOLIDAYS
A number of Banks have announced mortgage holidays of up to three months for any individual who is maderedundant or temporarily laid off as a result of the impact of Coronavirus.
5. TAX RELIEF
The proposed redrafting of the IR35 tax relief has been postponed for a year. It should also be note that whilst these initiatives (with the exception of sick pay) are very similar to initiatives instigated in 2008, it is possible that Government may introduce other similar initiatives such as Transitional Loan Funds and/or grant schemes.
6. EU MEASURES
The EU Commission has issued a Temporary Framework for small amounts of compatible aid meaning that, subject to some light touch due diligence, governments (including the UK) can give grants of up to €500,000 to businesses in difficulty which is very similar to the scheme introduced during the financial crisis. The EU Commission has also released £140 million for research on vaccines, diagnosis and treatment.
7. SUPPORT FOR COMMUNITY CHARITIES
It is anticipated that the Nations Emergencies Trust will be launching an appeal imminently to raise funds to support local charities affected by Coronavirus and that the fund will be administered by Community Foundations. A number of Community Foundations have already launched funds e.g. https://www.communityfounation.org.uk/coronavirusfund.
For more information, please contact:
T: +44 (0) 191 404 4178