By Gerald Couldrake
Howes Percival LLP
THE UK faces its biggest economic challenge in a generation, as the coronavirus sees global economies shut down and stock markets collapse in response to the pandemic.
At a time where we, in the UK, continue to heed the message Stay Home, Protect the NHS and Save Lives, our national and local economy sees businesses and offices closed, employees working from home or being furloughed, and high streets and public places become desolate.
Quicker, and already forecast to be more severe than the 2008 Global Financial Crisis, the coronavirus pandemic’s long-term economic impact is currently unknown and with no like-for-like comparisons, it is likely to be many more months before we understand the true economic implications.
Therefore, in an effort to ensure that this pandemic does not have the same long-term economic implications on both businesses and individuals’ lives and welfare as the 2008 Financial Crisis, the Government has announced a raft of new measures and protections, designed to promote economic activity, support businesses in the short term and to protect jobs in the long term, including the following:
1. The Coronavirus Business Interruption Loan Scheme (CBILS) went live on 23 March 2020, designed to provide loan facilities of up to £5m for smaller businesses who are experiencing lost or deferred revenues, leading to cash flow disruption. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and/or asset finance with an 80 per cent government backed guarantee which is interest and fee free for businesses for up to 12 months;
2. The Coronavirus Large Business Interruption Scheme was introduced to support larger businesses with a turnover higher than £45m up to £500m, to access loans of up to £25m. In a similar way to CBILS, this is also backed with an 80 per cent government guarantee to ensure lenders are confident to lend monies to such businesses; and
3. The Coronavirus Job Retention Scheme provides financial support for employers to pay part of their employees’ salaries through the coronavirus crisis where they might otherwise have to make redundancies or lay-offs. The Government have stated that there is no limit on the total amount of money available under the scheme. All UK businesses who are employers with a PAYE scheme are eligible and employers can claim for 80 per cent of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage
Further schemes, rules and support are being offered on an almost daily basis, so for the latest information and updates, together with other support that Howes Percival can provide to you and your business at this difficult time, please visit www.howespercival.com/coronavirus where our dedicated hub is continually being updated with additional resources and support.