As the global pandemic COVID19 broke out, It worst-hit small and medium-sized businesses. It is not the first time the economy has faced the downturn, but this is the first time the economy has witnessed such a horrible condition.
Most of the businesses have been forced to shut down as people are not allowed to gather in a vast congregation. As there is still no idea when the vaccine will be launched to contain COVID19, the government is trying to mitigate the impact of the virus on the financial condition of people.
The government has come up with various schemes and grants to help small entrepreneurs to withstand the hit of the virus. Here are the grants that small and medium-sized businesses can avail to minimize the impact of COVID19.
Cash grants
It is not a particular type of grant offered by local authorities to small and medium-sized businesses. It includes a wide range of financial support services that include but not limited to coronavirus job retention scheme, paying sick pay, business rates relief and business support grant funds.
Which scheme you will be eligible and how much funds you will get depend on the size of your business. One business can apply for one business grant. However, this is an exception to those businesses that have a large number of outlets.
Since these are cash grants, you do not need to pay back, but this money is taxable. These cash grants are suitable for all types of businesses as long as the worth of the property they occupy is not more than £15,000.
Retail and Hospitality grant funds
As the name suggests, these grants have been specifically designed for businesses in the retail and hospitality industry. As the hospitality sector is the worst hit by the pandemic COVID19, the government has decided to grant £25,000 to those based in England.
However, the rateable value of the property should be between £15,000 and £51,000, and the insurance policy must not be covering pandemics. Companies that have a relevant insurance policy covering pandemics are not allowed to apply for these grants. They need to turn to the insurance company to get a claim.
Coronavirus bounce back loan scheme
During the outbreak of coronavirus, many small businesses have been struggling to have cash coming in, and hence they are not able to pay salary to their staff. The bounce-back loan scheme allows such businesses to borrow funds quickly. However, the size of the funds will be between £2,000 and £50,000, worth up to 25% of the turnover.
These loans are not like standard loans you take out with direct lenders. For the first 12 months, you will not have to pay interest and then the interest rate will be accrued 2.5%. No interest penalties and fees will be imposed if you make early repayments.
Note that this scheme leaves out banks, insurers, public sector bodies, state-funded primary and secondary schools or business that were established on or after March 1. You are not eligible for these funds if you have been applying for business interruption loan scheme and COVID19 corporate financing facility.
The Business interruption loan scheme
If you need a large number of funds, you can apply for the coronavirus business interruption loan scheme. According to this scheme, you are eligible to get access to funds up to £5 million provided the annual turnover is up to £45 million.
For the first 12 months, you will not have to pay interest. This scheme also leaves out banks, insurers, public sector bodies, and state-funded primary and secondary schools.
Coronavirus large business interruption scheme
This scheme also includes large businesses along with medium-size businesses. You are eligible for this funding as long as the annual turnover of your company is up to £45 million and you have not received support under COVID19 corporate financing facility.
COVID19 corporate financing facility
This facility mainly aims at large companies that have a good credit rating but lately struggling to keep up with expenses due to financial problems. It can allow you to fund your short-term liabilities.
In case you do not have a good credit rating, you will have to apply for long term loans with direct lenders. Some lenders are funding such companies’ liabilities at affordable interest rates, you only have to find them and approach.
This is the critical time for small businesses, and the government is leaving no stone unturned to help you stay afloat. To know how you can apply for these benefits, go to the official website of the UK government where everything is explained in detail about such grants.
These COVID19 grants have the aim to help small and medium-size businesses unless the economy recuperates. If you are not eligible for these grants due to any reason, you can take help from direct lenders like Easy Money Loans.
