An update on Funding options
With many businesses being severely impacted by the social distancing rules due to Coronavirus (Covid-19) and still awaiting grants from the Government such as Furlough payments, what are the funding options available to help businesses survive through this period?
The Government’s Business Interruption Loans have seen an increase in approvals with the banking lobby group UK Finance confirming that 16,600 applications have now been approved. Thousands have complained that the application process is cumbersome and there are too many hurdles to jump through. Currently the Government underwrites 80% of the loan but there were calls to increase this to 100% to make the loan more accessible. Following this, the Government have now launched their Micro Loan scheme which will provide £50,000 of support to small businesses and will be launched on Monday 4 May, you can read more here.
With over eight million employees currently on furlough, HMRC has received a huge amount of Job Retention Scheme applications so far. This scheme involves businesses paying employees’ wages until they can claim the money back from HMRC which can have a significant impact on cashflow as businesses wait for the funds to be paid from HMRC. A new product which has come to the market is the Job Retention Scheme finance, lenders are offering this produce to bridge the gap between the Furlough claim being submitted to HMRC and the pay-out (about 5-10 working days) this can provide much needed help for businesses who are awaiting their grant whilst paying staff.
Of course, there are still the other funding options available to businesses such as capital repayment holidays, overdrafts and working capital extensions.
We have provided details on all the various grants and schemes available which you can find in our Coronavirus (Covid-19) hub.