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Load The Odds In Your Favour – Help Your Business Recover And Grow

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This month we transition from one jobs support scheme to another, defer VAT from a single deferred payment to a repayment scheme, help create jobs for the young unemployed and then there are the extensions to existing measures: help for the self-employed, VAT reductions for hospitality and tourism, application deadlines for Government backed loans and the terms those loans can run for.

In every strand of the above measures and schemes, we have witnessed companies that are informed and planning their way forward fare better, and are ahead in receiving help, accessing funding and bottom line, starting to recover their business.

How can you ‘Load the Odds In Your Favour’? Don’t walk through this period alone – whether it be accessing all of the available information, working with us to achieve suitable finance for your business, or talking to one of the many professional services that can support your company: 

  • HR 
  • Health & Safety
  • Accountant
  • Commercial Solicitor
  • Finance Director consultant

To name just a few – if you don’t know someone in an area that you need help in, then we have highly skilled, professional partners that we would not hesitate to recommend to you.

If you think about anything for your business this month, we recommend these key measures and updates:

Last month of the Furlough Scheme – have you evaluated the Job Support Scheme?

The Furlough Scheme 

  • For the month of October, HMRC pays 60% of furloughed staffs’ wages up to a cap of £1875 via their Coronavirus Jobs Retention Scheme (CJRS)
  • What this means practically – you pay staff 80%+ of their standard monthly wages, up to a cap of £2500, your contribution being the difference between the CJRS’s 60% and the amount you pay staff

The Job Support Scheme

  • Runs for six months from November 1st, allowing employers to reduce employees working hours from normal levels as an alternative to redundancy
  • Employees must work at least 1/3 of their normal hours, with employers and the Government contributing 1/3 each to the reduced and unworked hours
  • It translates to someone working 1/3 of their hours earning 77% of their normal wages, with the government grant capped monthly at £697.92

Full factsheet explainer: https://www.gov.uk/government/publications/job-support-scheme

Defer, er, the VAT deferral

  • In a nutshell, VAT that had been deferred in agreement with HMRC to March 2021 can now be deferred into repayments over 11 months from that point through the 2021/22 tax year, with no interest accrued or paid for this period
  • A broadly supported move that avoids a cashflow cliff edge for many companies as they emerge from an extended period of restrictions over winter

To take advantage of this scheme you need to ‘Opt-In’: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

KickStart Scheme for Youth Employment

  • Announced a month ago, employers have already bid for more than 65,000 placements for young people
  • Funding available for new job roles created for a 16-24 year old, and includes up to a £1,500 payment for training, support and uniform etc in creating the role
  • Funding covers the relevant national minimum wage for a 25 hour week and associated employer NI contributions

Expanded details: https://kickstart.campaign.gov.uk

Self-Employed Grant Scheme extended into the New Year

  • The announced extended grant will cover 3 months of profits for eligible self-employed from November to January
  • The grant is worth 20% of average monthly profits up to £1875 for claimants

Government factsheet here: https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension

Emergency, targeted VAT cut is extended

  • The emergency reduction in VAT on Hospitality and Tourism sectors is extended to March 31st from its original January 2021 deadline

The original guidance here: https://www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions

Government backed Coronavirus loan schemes – Application deadline and loan terms

  • Application deadlines for both the Bounce Back Loan (BBL) and the Coronavirus Business Interruption Loan Scheme (CBILS) extended to midnight November 30th to support more businesses as some restrictions were re-imposed
  • BBL now available with extended term of 10 years, from previous 6 months, plus an initial interest or payment holiday up to 6 months at the point that payments should commence
  • CBILS government guarantee now extended up to 10 years – lender feedback that we have received is that 10 year loans may be limited to the High Street banks, if anyone
  • A new government loan scheme will be announced in due course and available from January 2021

We strongly believe that for Covid affected, eligible companies, the next two months of extended application time represents a unique opportunity to access funding that there is no guarantee will be replaced in 2021. If and when underwriting returns to a world of no Government guarantees, and companies are evaluated on 100% of the risk of the borrowing, unfortunately there could be a period of adjustment for both businesses and lenders.

CBILS provides access to a range of different products other than just business loans – worth reminding ourselves of the options, available to you through us, as we have an extended window of opportunity now to November 30th for eligible companies to apply:

CBILS Business Loans – Loans from £50,001 to £500,000, over 2 to 5 years

No Personal Guarantee or security taken up to £250,000 – No set up fee, no interest charges in the first 12 months and no early repayment charges

CBILS Invoice Finance – Differing scheme features from our lender panel:

  • Invoice Finance with no set up costs, no service fee and no interest charges for 12 months (100% cost free for 12 months) – and no ongoing contractual ties beyond that period
  • Term loan alongside an Invoice Finance facility – loan for up to 40% of the facility level for up to 5 years, CBILS Business Loan benefits apply
  • ‘Top Up Funding’ – commonly up to 30% extra added to the pre-payment limit of the Invoice Finance facility – up to a maximum of 100% of invoice amounts submitted – no interest charged on the ‘Top Up’ portion for 12 months

CBILS Asset Finance – Available up to £5m over a maximum term of 6 years

New Asset Finance deals and Asset Re-Finance, with the possibility of a term loan alongside the Asset Finance if this is necessary to support the business

CBILS Trade Finance – Revolving facility up to £5m notional

No set up or service costs and no interest charges in the first 12 (100% cost free for 12 months) – Facilities > £250,000 require a Personal Guarantee for 20% of the notional limit

CBILS Eligibility check: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

Not every company is going to be eligible for CBILS, and CBILS finance is not going to suit every business. Away from the Coronavirus schemes we work with a large panel of lenders (both bank and non-bank) on all types of commercial finance for your business – loans or invoice/property/asset related products. With a conversation we can evaluate the suitability of all the available options to your business.

And that in a nutshell is our ethos – partner with you to get you the most suitable finance for your business.

Load the odds in your favour, and start the conversation about getting funded today:

01245 979 100 / mark@essexcommercialfinance.co.uk

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Essex Commercial Finance Limited  is a company registered in England and Wales with Company number 12610135
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