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We Can Only Deal With What’s In Front Of Our Nose – Ask Orwell

Rishi Sunak

“To see what is in front of one’s nose needs a constant struggle.”

George Orwell.

A feature of the Covid-19 pandemic is the constantly evolving and changing environment that we don’t only have to deal with, but that we have to plan for. And where our businesses are concerned things change so much and so often that this can prove practicably impossible!

So we can only plan for what is in front of our nose today – and where possible factor that by the end of the week this could change again.

All the way through the pandemic 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.

Restrictions for England from November 5th to December 2nd:

  • Stay at home, except for specific purposes.
  • Avoid meeting people you do not live with, except for specific purposes.
  • Close certain businesses and venues.

Full details of the restrictions and how they affect homes, businesses, education and all other aspects of our lives can be found here:

https://www.gov.uk/guidance/new-national-restrictions-from-5-november

Wales – Coronavirus firebreak rules until November 9th – as we write we are still waiting for an update on what comes next in Wales:

https://gov.wales/coronavirus-firebreak-frequently-asked-questions

Scotland – A 5-tiered system of local protection levels is operating, with differing restrictions applying to each:

https://www.gov.scot/coronavirus-covid-19/

Northern Ireland – 4-week restrictions in place from October 16th:

https://www.nidirect.gov.uk/articles/coronavirus-covid-19-regulations-guidance-what-restrictions-mean-you

Local Restrictions Support Grant (LRSG)

The LRSG had helped businesses ordered to close in local tier 3 lockdowns in England and is available to businesses required to close in the national restrictions brought in from November 5th.

The grants will be based on business rates, similar to the Retail, Hospitality and Leisure Grant Fund (RHLGF) that was available during lockdown 1.0 in the spring.

A difference will be businesses with rateable values in excess of £51,000 will be able to access a grant:

  • For properties with a rateable value of £15,000 or below, grants to be £1334pcm, or £667 per two weeks
  • For properties with a rateable value of between £15,000 and £51,000 grants are £2000pcm, or £1000 per two weeks
  • For properties with a rateable value over £51,000 grants are £3000pcm, or £1500 per two weeks

Local Authorities are distributing the LRSG and you should check their website for more locally relevant information in the first instance.

The Furlough Scheme

The CJRS (also known as the Furlough Scheme) will remain open until 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme

Self-Employment Income Support Scheme (SEISS) grant extension

  • The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period.
  • The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
  • The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.

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

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

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

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 January 31st 2021 to support more businesses as lockdown restrictions were re-imposed
  • Companies that have already received a BBL but did not apply for their maximum amount (25% of 2019 turnover) can now re-apply and top up their loan.
  • 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 three 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 January 31st 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 and best possible outcome for your business.

We wish everyone at your business all the very best, and stay well.

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