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 provides convertible government loans ranging from £125,000 to £5 million to innovative UK-based companies that are currently being impacted by the coronavirus. The loans are subject to at least equal match funding from private investors. The scheme is being delivered by the British Business Bank.
To find out more about applying for the scheme and the eligibility criteria please click here.
The Future Fund has been extended to 31st January 2021.
Aimed at larger corporates who are strong credits (investment grade) but experiencing liquidity pressures due to the impact of COVID-19. The CCFF will allow large corporates to access short term financing through issuing Commercial Paper (“CP”). The fund will be managed and administered by the Bank of England (“BoE”) on behalf of HM Treasury.
Find out more about the COVID-19 Corporate Financing Facility.
The Coronavirus Job Retention Scheme has now been extended until the end of March 2021. Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500. Businesses will be able to bring furloughed employees back to work on a part-time basis or furlough them full-time. Before, companies had to cover 20% of furloughed wages, while the government paid 60%. Now, the government will cover the full 80%, with the employer only having to pay National Insurance and employer pension contributions.
The Job Support Scheme has been postponed until the furlough scheme ends.
The scheme, which has already provided two grants, has now been extended to provide two further grants. 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, and will set out further details in due course.
The grants are taxable income and also subject to National Insurance contributions.
The VAT payments deferral scheme ended on 30th June 2020. Businesses who deferred VAT due from 20th March to 30th June 2020 will now have the option to spread their deferred VAT payment over a longer period. Rather than paying in full by the end of March 2021, they will be able to pay in smaller instalments up to the end of March 2022. Businesses will need to opt in to the scheme. Find out more.
The 15% VAT cut for the tourism and hospitality sectors has been extended to the end of March 2021.
Advice and support