As the Coronavirus pandemic forces the UK population to stay at home, companies and employees alike are left with uncertainty regarding cash, debt and staff. In response, Michael Hall, Partner at leading Yorkshire law firm Keebles LLP, has provided some detail on the options available to businesses affected by the economic impact of Covid-19.
The Government has set out a wide-ranging package of measures to support businesses through this period of disruption which are aimed at easing cash-flow pressures and avoiding redundancies. Keebles’ special report on these measures can be found at www.keebles.com/Covid-19.
Michael Hall, Partner at Keebles LLP said: “The primary form of cash-flow support available to most businesses is through 80% Government-guaranteed loans which are being provided through two schemes: the Coronavirus Business Interruption Loan Scheme (CBILS) and the recently announced Coronavirus Large Business Interruption Loan Scheme. Very large businesses can access support via a separate Covid Corporate Financing Facility scheme being operated by the Bank of England.
“While these schemes were initially welcomed by business groups, there are concerns with the speed at which this funding is being made available to businesses – in particular SMEs – who are in many cases experiencing immediate and severe cash-flow pressure.
“Recent updates to the CBILS were intended to simplify the application process, but delays in the provision of funding are still being reported by many applicants. Recent calls for the guarantee under the CBILS scheme to be extended to 100% for small businesses to reduce the administrative burden on banks have so far been rejected by the Chancellor.
“In the meantime, businesses that are able to quickly provide accounting and other information which shows that, in normal circumstances, the loan would be affordable, as well as evidence of the other action the business has taken in relation to its cash-flow (for instance, by taking advantage of some of the other measures highlighted in our Special Report) will stand the best chance of getting applications approved and loans made available quickly.”
In addition, support for paying employees comes from the Coronavirus Job Retention Scheme (CJRS).
Michael added: “Applications for claims under the CJRS opened on 20 April 2020 (with the Government reporting over 100,000 applications on the first day) with initial payments expected to be made before the end of April.
“Recent Government guidance on the CJRS has extended the date of applicability to employees on payroll as at 19 March but it remains to be seen whether further changes to the two schemes will be made to address other concerns raised by business groups.
“Finally, the Government has also put in place a number of other measures to assist businesses which are detailed in our Special Report, for example the Self-Employment Income Support Scheme as well as grants for small businesses and the Statutory Sick Pay Rebate Scheme.
“The measures listed above are subject to regular review and change, so it is important that businesses take appropriate advice before accessing support. Keebles stands ready to help clients in any way we can to ensure that they benefit from the support to which they are entitled.”
If you have further questions on any matters raised in Keebles’ Special Report, contact Michael Hall on michael.Hall@keebles.com.