FINANCE
Your quick guide
to Covid-19
business support 1
“Despite the current challenges, there are numerous
success stories. These include businesses that have
been in demand, those who have found more efficient
ways of working and entrepreneurs who have emerged
with innovative ideas for start-up businesses, perhaps
following redundancy or as a result of reassessing life
goals,” says director Trevor Cook.
“For existing businesses, many owners, directors and
managers are taking stock and putting solid plans in
place to bounce back,” he continues.
“Sadly, there will be businesses that are experiencing
cash flow issues. So in addition to drawing on
government-backed financial support, we would
encourage them to explore a range of measures, such
as:
> avoiding falling into the trap of ‘over-trading’
> thinking carefully before committing to capital
expenditure and consider the funding options
available
> ensuring invoicing and credit control systems are
working efficiently
> reviewing overhead costs.
“The over-riding message is that things have
changed and there will be more change to come. As
we move forward, we would recommend planning
ahead, maintaining an element of flexibility and talking
to your accountant or professional business adviser
earlier rather than later,” adds Trevor.
The team at Baines Jewitt is closely
following the latest developments
announced by the government to
help UK businesses and the economy
address the coronavirus challenge.
They have put together a quick-look guide,
highlighting the important points:
> The Coronavirus Job Retention Scheme
(CJRS) - claim for a percentage of employee
wages, plus any employer National Insurance
and pension contributions if put on furlough
because of coronavirus. The scheme ends on
October 31 2020 and the level of support will
taper off from August.
> The Bounce Back Loan scheme (BBLS) - aimed
at small to medium-sized businesses looking to
borrow between £2,000 and £50,000 (up to
25 per cent of their turnover) to help with cash
flow and other issues.
> The Coronavirus Business Interruption Loan
Scheme (CBILS) - available to UK- based small
and medium-sized enterprises (SMEs) with an
annual turnover of £45m or below.
> The Coronavirus Large Business Interruption
Loan Scheme (CLBILS) - aimed at medium
and large businesses. The government has
extended the maximum loan size available
to £200m, but with restrictions placed on
dividend and bonus payments by borrowers.
> The Future Fund - aimed at rapidly growing
businesses that typically rely on equity
investment. Criteria dependent, but has
recently expanded to include firms that have
moved their HQs abroad.
> Self Employment Income Support Scheme
(SEISS) – aimed at the self-employed or a
member of a partnership, this scheme provides
a taxable grant of 80 per cent of average
monthly trading profits, covering three months
and capped at £7,500. Applications for first
round grants close on July 13 2020. Claims for
second and final grants will open in August
2020.
1
Information correct at time of writing
“My key message to businesses
is to have a strategy in place,
embrace the new working
environment, be flexible and plan
even more than you did in the past.”
The voice of business in the Tees region | 49