Updated: Mar 23, 2020
The current threat to UK SME’s is unprecedented. Access to readily available cashflow is going to be vital to businesses being able to trade through these difficult times.
Advice for SME’s
Specifically for small business, the FSB has collated information and advice for employers in relation to COVID-19. In addition to the basics covered by the government, it includes guidance on:
Having a relevant business continuity plan (BCP) in place
What to do if you have to close your business due to COVID-19
Information on what your duties are as an employer
How employers should respond to employees refusing to work
Business owners should speak to all creditors, supppliers and partners if they believe payment terms will not be met. The quicker that this can be addressed, the more options that may be available to you.
For the full information, visit the FSB website.
What's the government doing for business?
On March 17th, the chancellor, Rishi Sunak, announced £330bn of guaranteed loans to be made available for businesses. This is in addition to a package of measures available to help businesses – first sketched out last week – which is now worth over £20bn.
£2bn of sick-pay rebates for up to 2m small businesses with fewer than 250 employees
The abolition of business rates for this year for businesses in the retail, hospitality and leisure sectors, with a rateable value of less than £51,000
An additional cash grant of up to £25,000 each for those businesses
The provision for any company eligible for small business rates relief to be allowed a £10,000 cash grant, which could help 700,000 small businesses
In the most recent announcement, Sunak stated that any business that needs it will be able to access a loan on “attractive terms”, adding that if he needs to go further than the £330bn, he will.
An agreement with the Bank of England has been put in place to support liquidity amongst larger firms. While smaller firms will have access to an extended business interruption loan scheme, which will now offer loans of up to £5m – with no interest due for the first six months. The chancellor says both schemes will be up and running by next week.
More details will be announced in the coming weeks. For information on the measures unveiled so far, click here.
What about finance?
In addition to the Chancellor's stimulus package, the Bank of England has cut UK interest rates from 0.75% to 0.25%. The emergency move is designed to lower financing costs to encourage borrowing and investing, stimulating economic growth at a time of low optimism in the economy.
However, Stephen Jones, chief executive of UK Finance has suggested businesses who expect to be impacted by the COVID-19 outbreak should contact their finance providers as soon as possible.
“Banks, building societies and credit card providers understand that some of their customers may be worried about the effect that contracting the Coronavirus (COVID-19) could have on their finances, for example due to a drop in income or because of unexpected expenses or bills to pay,” he said in a statement released on March 5th. “All providers are ready and able to offer support to their customers who are impacted directly or indirectly by COVID-19, which could include offering or increasing an overdraft or allowing repayment relief for loan or mortgage repayments: asking for help early is key.”
The UK’s major banks have announced individual measures:
Barclays has a range of options for business customers, including 12 month capital repayment holidays on existing loans over £25,000 and increasing overdraft facilities.
RBS has said it was offering more flexibility over loans to businesses, suggesting repayments may be deferred by up to three months for those in financial difficulty
NatWest has pledged £5bn Working Capital Support for SMEs during the Coronavirus outbreak
The Lloyds Banking Group said it would be open to requests from small businesses for overdraft extensions and other support
Approved Business Finance are here to help
Now, as ever, we are committed to making finance accessible to UK small businesses and large enterprises.
We designed our commercial loan products as a working capital solution for businesses. Many of our existing customers have used it to overcome unexpected costs and provide liquidity in times of uncertainty.
It’s easy to find out how we can help your business too. Existing customers can contact their account manager to discuss additional funding or top-ups. If you're not an Approved customer but are interested in learning more, call us on 01908 429888 or apply online using our Check Your Eligibility feature. Our enquiry application takes just 30 seconds however as a responsible broker and lender, we take a 360-degree view of a businesses performance and will require further documentation to fully assess your business. This helps us to offer a solution that is affordable to your circumstances.
Once approved, customers can expect to receive funds in as little as 24 hours. You can pay off your loan in full at any time with no fee, and will only pay interest for the time you borrow.
Businesses can benefit from immediate business cashflow products such as:
Unsecured Commercial Loans
Your business can also benefit from our other essential business finance products such as:
This article has been written for distribution. For media enquiries please contact email@example.com
(We have used excerpts from one of our lender partners iwoca, as well as the FSB and Government sources in order to create this informative article.)