Loans and Grants

New Grants for High Street Businesses and Hospitality Sector

With the UK having been adversely affected by the Coronavirus (COVID-19) pandemic, Chancellor Rishi Sunak presented the 2021 Budget against a backdrop of ongoing economic hardship. We’ve summarised the key points relating to the grants available for high street businesses and the hospitality sector and the New Recovery Loan Scheme.

Businesses forced to close due to the Coronavirus lockdown will be eligible to apply for grants of up to £18,000 depending upon the rateable value of their business premises. Pubs, restaurants, hotels, gyms and hairdressers will be eligible for a grant of up to £18,000 per premises whilst non-essential retail businesses will be eligible to apply for a grant up to a maximum of £6,000.

The grants are intended to be a contribution towards the fixed costs of the business during the period that they have been unable to trade normally. Staff costs continue to be covered by the CJRS furlough scheme.

The government will also continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021.

Unfortunately, the “Eat out to Help Out” scheme will not be reintroduced this Summer.

New Recovery Loan Scheme

The government have already announced a longer repayment period for “Bounce-back” and CBIL loans. From 6 April 2021 a new Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.

Our summary of the Chancellor’s 2021 Budget is now available below.

Budget Summary

Plan for Jobs: Chancellor increases financial support for businesses and workers

On 22 October the government announced it will significantly increase the generosity and reach of its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come, supporting jobs and helping to contain the virus.

The Chancellor announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.

These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless. For more information see the Business Grants Factsheet.

Check if you are Eligible for the Coronavirus Local Lockdown Restrictions Support Grant

Published 24 September the Local Restrictions Support Grant (LRSG) supports businesses that have been required to close due to temporary COVID-19 local lockdown restrictions imposed by the government.

The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in person to customers from their business premises, but which were then required to close for at least 3 weeks due to local lockdown restrictions imposed by government.

It is for businesses that pay business rates on their premises. Local councils may at their discretion also provide funding for businesses that don’t pay business rates.

Eligibility

Your business may be eligible if it:

• occupies property on which it pays business rates
• Is in a local lockdown area and has been required to close because of the formal publication of local restrictions guidance that resulted in a first full day of closure on or after 9 September. This funding is not retrospective
• has been required to close for at least 3 weeks because of the lockdown
• has been unable to provide its usual in-person customer service from its premises

For example this could include non-essential retail, personal services or cafes/restaurants that operate primarily as an in-person venue, but which have been forced to close those services and provide a takeaway-only service instead.

Eligible businesses will get one grant for each property liable for business rates within the lockdown zone.

Businesses that are required to close but do not pay business rates may be eligible for funding at the discretion of the local council, as may businesses not required to close but which are severely impacted.

If your business is eligible and has a property with a rateable value of less than £51,000, you will receive a cash grant of £1,000 for each 3-week period your business is closed.

If your business is eligible and has a property with a rateable value of £51,000 or above, you will receive a cash grant of £1,500 for each 3-week period your business is closed.

The grant will be extended to cover each additional 3-week period, so if your business is closed for 6 weeks it will receive £2,000 or £3,000, depending on the rateable value of the property.

Grants will be based on the rateable value of the property on the first full day of local lockdown restrictions.

Discretionary Funding

You may receive a grant of up to £1,500 at the discretion of your local council if:

Your business is required to close but you do not pay business rates

If your business is not required to close, but has been severely affected, for example as a result of customer businesses being closed

Your local council will publish details of discretionary funding on their website.

Exclusions

• businesses which are able to continue to operate during the lockdown because they do not depend on providing direct in-person services from their premises
• businesses that have chosen to close, but have not been required to close as part of a local lockdown
• businesses that are still subject to national closures such as nightclubs
• businesses that have reached the state aid limit

If you already get state aid

The Local Restrictions Support Grant counts towards state aid.

Payments count towards the total de minimis State aid you’re allowed to get over a 3-year period - €200,000. If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework. The limit for the framework is €800,000.

Your local council will ask you to complete a declaration confirming that:

• You will not exceed the relevant State aid threshold
• You were not an ‘undertaking in difficulty’ on 31 December 2019. This applies only to the COVID-19 Temporary Framework

The undertaking in difficulty test does not apply to small and micro undertakings (less than 50 employees and less than EUR 10 million of annual turnover and/or annual balance sheet) unless they were already in insolvency proceedings, have received rescue aid that has not been repaid, or are subject to a restructuring plan under State aid rules.

How to apply

Visit your local council’s website to find out how to apply https://www.gov.uk/find-local-council.

Bounce Back Loans - Flexibility Given to Pay Back Amounts Borrowed

More than a million businesses who took out a Bounce Back Loan will get more repayment time through a new Pay as You Grow flexible repayment system.

This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.

The Government also intends to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.

The chancellor also announced an extension in applications for the government’s Coronavirus loan schemes until the end of November.

Further guidance will be issued in due course. See: Winter Economy Plan.

Ministers announce new grants for businesses affected by local lockdowns

Ministers have announced new funding to support businesses impacted by Covid-19.

Businesses in England required to close due to local lockdowns or targeted restrictions will now be able to receive grants worth up to £1,500 every three weeks. To be eligible for the grant, a business must have been required to close due to local Covid-19 restrictions. The largest businesses will receive £1,500 every three weeks they are required to close. Smaller businesses will receive £1,000.

Payments are triggered by a national decision to close businesses in a high incidence area. Each payment will be made for a 3 week lockdown period. Each new 3 week lockdown period triggers an additional payment.

The scheme provides a safety net to further protect jobs where a business is required to close and comes in addition to billions of pounds of existing loans, grants and tax breaks as well as the Chancellor’s Plan for Jobs.

Further information on the scheme, who is eligible and how the grants will be distributed can be found here.

The Government Actuary’s Department (GAD) kickstart for film and TV productions

The Government Actuary’s Department (GAD) has helped to deliver a project which is providing £500m to the UK film and TV industries adversely affected by COVID-19.

The new ‘Film and TV Production Restart Scheme’, set up with the help of modelling and actuarial expertise provided by GAD, is set to help jumpstart productions.

Insurance Issues

The UK’s film and TV production sectors support more than 180,000 jobs and contribute more than £12 billion a year to the economy. However, the Coronavirus global pandemic has led to severe problems for all aspects of production.

The extensive effects of lockdown and social distancing meant domestic production and filming projects were not able to get adequate insurance, so filming was halted or could not begin.

New Scheme

In this 2-month long project, GAD worked with the Department for Digital, Culture, Media and Sport (DCMS) to create a compensation fund which complements commercially available insurance schemes so that cover is complete.

If you are in this sector please click here for further details.

New Grants to Boost Recovery of Small Businesses

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, the Minister for Regional Growth and Local Government has announced.

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.

The support will be fully funded by the Government with no obligation for businesses to contribute financially and the support will be fully funded by the government from the England European Regional Development Fund and distributed through local enterprise partnerships (LEP) Growth Hubs, embedded in local areas across England.

LEPs are voluntary partnerships between local authorities and businesses, set up in 2011 by the Department for Business, Innovation and Skills to help determine local economic priorities and lead economic growth and job creation within the local area.

Activities supported through the £20 million can include:

• One-to-many events providing guidance to respond to Coronavirus,
• Grants (£1,000 - £5,000) to help businesses access specialist professional advice such as HR, accountants, legal, financial, IT and digital, and to purchase minor equipment to adapt or adopt new technology in order to continue to deliver business activity or diversify.

More information on the grant can be found here.

Local Authority Discretionary Grant Fund Launched

The Discretionary Grant Fund supports small and micro businesses that are not eligible for other grant schemes opened on the 8 June.

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.

What you get

You can get a grant of £25,000, £10,000 or any amount under £10,000.

Eligibility

You may be eligible if your business:

• is based in England
• has relatively high ongoing fixed property-related costs
• occupies property (or part of a property) with a rateable value or annual mortgage/rent payments below £51,000
• was trading on 11 March 2020

You will need to show that your business has suffered a significant fall in income due to Coronavirus.

The Government has asked local councils to prioritise businesses such as:

• small businesses in shared offices or other flexible workspaces, such as units in industrial parks or incubators
• regular market traders
• bed and breakfasts paying council tax instead of business rates
• charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief

Local councils have discretion about how to prioritise this funding. Please check with your council for details of their scheme.

You cannot apply if your business is in administration, insolvent or has received a striking-off notice.

If you are already claiming funding

You cannot apply if you are already claiming under another government grant scheme, such as:

• Small Business Grant Fund
• Retail, Hospitality and Leisure Grant
• Fisheries Response Fund
• Domestic Seafood Supply Scheme
• Zoos Support Fund
• Dairy Hardship Fund

Businesses that apply for the discretionary grants scheme can still apply for Coronavirus-related loans if they are eligible.

You are still eligible if you have applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme.

For the full report click here.

Government announces “bounce back” loans for small businesses

The Government has announced a new 100% Government backed loan scheme for small businesses.

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

• Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.
• Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form.
• Loan terms will be up to 6 years.
• No repayments will be due during the first 12 months.

The scheme will launch for applications on Monday 4 May. Businesses will be able to access these loans through a network of accredited lenders.

The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.

Eligibility

You can apply for a loan if your business:

• is based in the UK
• has been negatively affected by Coronavirus
• was not an ‘undertaking in difficulty’ on 31 December 2019

Who cannot apply

The following businesses are not eligible to apply:

• banks, insurers and reinsurers (but not insurance brokers)
• public-sector bodies
• further-education establishments if they are grant-funded
• state-funded primary and secondary schools
• if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).

More information about the scheme will be published shortly. Click here for further details.

Find out if your business is eligible to receive government support

You may be eligible for loans, tax relief and cash grants. Use the business support finder to see what support is available for you and your business.

Coronavirus Business Support Finder