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Accounting for COVID-19

 

Helping you make sense of the support available to your business.

Almost every business in Britain has been affected by the coronavirus crisis in recent days. And while a few have been positively impacted, the majority have been hit hard and will be looking for sources of support. We’ve put together this short guide to help you navigate the finances available during this testing time, and because the information is changing so quickly, we’ll be updating it regularly. Please check back in future.

 

Funding support

Cashflow is likely to be an issue in the short term, with many companies having to retool their operations and invest in the equipment required for working from home. Reassuringly, many lenders have so far reacted positively to recent events and have waived arrangement and review fees on new or increased overdrafts. There have also been positive moves from invoice finance providers and these companies can prove useful to many.

Meanwhile, the government  has announced a range of measures including a Coronavirus Business Interruption Loan Scheme. This is a major initiative that will provide businesses with loans of up to £5 million – with no interest due for the first six months. And while £5m is the kind of loan that perhaps larger, national firms will be looking to secure, the loans start at £1000 making this a workable scheme for smaller businesses.

In addition, there are no fees attached and the government will cover up to 80% of any losses from loans provided.

 

Is your business eligible?

The exact details are being finalised at the time of writing this article, the initial advice from the government is that businesses should:

  • Be based in the UK
  • Have insufficient security for normal lending requirements
  • Have a turnover of no more than £41m per year
  • Have a sound proposal for borrowing
  • Operate within an eligible sector (yet to be confirmed)

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

 

Cash grants

Many businesses will also be eligible for cash grants that should further alleviate cashflow and help with fixed costs. Businesses within the retail, leisure and hospitality sectors can apply for cash grants of up to £25,000 – as well as a 12-month business rate holiday.

And rather than the £3,000 cash grant that was first announced, businesses eligible for small business rates relief will now receive £10,000 to support cash flow. Small businesses that pay little or no business rates and are eligible for this Small Business Rate Relief (SBBR) or rural rate relief will be contacted by their local authority automatically – they do not need to apply. The funding will be provided to local authorities in early April.

 

Sick pay

Finally, as has been widely circulated in the press, for businesses with fewer than 250 employees, the cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the government in full.

As mentioned before, this is a fluid situation and we’ll be posting updates here on our blog regularly. Please check back for more details periodically.

Better still, you can access a whole host of resources for business owners including blogs, smart guides and infographics for free. Simply opt in here.



Business Control Limited
Red Lion Yard,
Odd Down,
Bath, Somerset,
BA2 2PP,
United Kingdom

Registered in England
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No.: 04516455

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Call: 01225 840538

Email: hello@businesscontrol.co.uk

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