There are still a number of finance options for businesses in Wales who need finance during the Coronavirus pandemic.
Schemes and initiatives
Building upon infrastructure which is in place for an existing scheme, this fund is available to SMEs and enables lenders to provide finance of up to £5 million to support smaller businesses affected by the coronavirus crisis.
It is being administered by the British Business Bank, with funding provided by a range of lenders who will benefit from a government guarantee.
Please note this fund is not offered by the Development Bank of Wales.
The scheme has been extended to 31st March 2021.
The latest round of the Economic Resilience Fund (ERF) includes:
- The ERF Restrictions Business Fund, which is aimed at hospitality, tourism, non-essential retail, leisure and supply chain businesses who have been impacted by the new national restrictions. Linked to the non-domestic rates system eligible businesses will qualify for a one-off payment of between £3,000 and £5,000. Find out more.
- The ERF Sector Specific Support (operating cost) package, which is designed to provide support to Hospitality, Tourism and Leisure (HTL) businesses and associated supply chain businesses that will be materially impacted by a greater than 60% impact of turnover as a result of the restrictions introduced on 4 December 2020 until 22 January 2021. The amount a business can claim from the sector specific fund is based on staff count and turnover. Check eligibility here.
- Businesses not on the non-domestic rates system can continue to apply to local authorities for the Lockdown Discretionary Grant of up to £2,000. This will provide support to sub-VAT sole traders without a property who are materially impacted by more than 40% reduced turnover as a result of the restrictions. Find out more.
Under this scheme, small and medium-sized businesses can borrow from £2,000 up to 25% of their turnover. The maximum loan available is £50,000. The government provides lenders with a 100% guarantee and covers the first 12 months of interest payments. After 12 months, the interest rate is set at 2.5% per annum. Find out more.
Please note that this is not offered by the Development Bank of Wales.
The Bounce Back Loan Scheme has been extended to 31st March 2021. Businesses that originally borrowed less than the maximum amount available to them may be eligible to top up their existing loan. The original loan amount plus the top-up must not exceed £50,000 or 25% of the annual turnover the borrower certified in the original application, whichever is lesser.
Small businesses who took out a Bounce Back Loan will now be able to repay borrowings over ten years, rather than the original six year term, cutting monthly repayments by nearly half. Businesses will also be able to make interest-only repayments for up to six months and apply for payment holidays.
The Future Fund scheme closed to new applicants on 31st January 2021. The online portal remains open for investee companies with legally completed convertible loan agreements (CLAs) to submit information.
The Coronavirus Job Retention Scheme has been extended until the end of September 2021. Under the currents scheme rules, employers can claim up to 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500, but they must pay National Insurance and employer pension contributions. From July, employers will be expected to pay 10% towards the hours their staff do not work. This will increase to 20% in August and September.
The scheme, which has already provided three grants, will continue to the end of September 2021 in the form of a fourth and fifth grant. As with the third grant, the fourth grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total. It will cover period of February to April. The fifth grant will cover the period May to September and will be worth:
- 80% of three months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of three months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
The grants are taxable income and also subject to National Insurance contributions.
Further details will be provided in due course. Find out more.
Businesses who deferred VAT due from 20th March to 30th June 2020 and still have payments to make now have the option to spread their deferred VAT payment over a longer period. The VAT deferral new payment scheme is open till 21st June 2021. It allows you to pay your deferred VAT in equal instalments, interest free, and to choose the number of instalments, from 2 - 11 (depending on when you join). Find out more.
The VAT cut to 5% for the tourism and hospitality sectors has been extended to the end of September 2021. There will then be an interim rate of 12.5% till 31st March 2022.
Advice and support