10 Government Covid Support Schemes For Businesses

Introduction

Business is the heart of the economy. Take out the small and medium businesses and about half of all Gross Domestic Product and half of all employees are gone. It would have a calamitous impact and so government covid support schemes were launched to help.

UK Government Covid Support

The effects of the COVID-19 pandemic have closed down millions of shops globally and have pushed far too many businesses into debt and to the brink of failure. 

Too many businesses failing, and the rise in unemployment would lead to a massive drop in tax revenues and far more hungry mouths to support.

That’s why governments are taking extreme measures to support these businesses to avoid a crisis and to keep their economies alive.

If you’re currently struggling to keep your business running, I’ve investigated different government support schemes and programs that might just help you push through these challenging times.

The 10 Government Covid Support Schemes

1. Coronavirus Job Retention Scheme (CJRS)

The Coronavirus Job Retention Scheme was announced on 20 March 2020 and was supposed to end in October of the same year. But due to the increased number of COVID-19 cases, this financial response was extended to April 30, 2021.

In a nutshell, the CJRS helps employers that can’t maintain their current workforce because of the struggles of the pandemic. In this scheme, the government will shoulder 80% of the salary hours not worked by the employees but with a cap of £2,500.

Under this financial support, employers only need to pay for their employee’s National Insurance and employer pension contributions. 

In terms of the furlough duration, there’s no minimum or maximum period for which an employee can be placed on furlough. There’s also no cap on the number of staff that the employer can have on furlough.

To see a step by step guide on how to claim your grant on this scheme, you can head out here.

2. Local Restrictions Support Grant (LRSG) (Closed)

The LRSG favours businesses that were open before the pandemic and now are closed due to the current circumstances.

For businesses to be eligible to get grants from this financial aid should be: 

  • Located in England
  • Their business is located in an area subject to Tier 2 or Tier 3 local restrictions since 1 August 2020.
  • The business was established before Tier 2 or Tier 3 restrictions.
  • Didn’t have to close but did so because of local restrictions.

The amount of grant under this support would vary on your property’s rateable value:

  • Properties with a rateable value of £15k or under should have a grant of £1,334 per month.
  • Properties with a rateable value of £15k-£51k grants to be £2,000 per month.
  • Properties with a rateable value of £51k or over grants to be £3,000 per month.

3. Local Restrictions Support Grant (LRSG) (Open)

LRSG (open) supports businesses that are permitted to open but still are greatly affected in terms of sales because of the lockdown. 

Here’s the basis of grants for businesses affected by Tier 2 and Tier 3 restrictions:

  • Properties with a rateable value of £15k or under should have a grant of £934 per month.
  • Properties with a rateable value of over £15k and under £51,000 should have a grant of £1,400 per month.
  • Properties with a rateable value of £51k and over grants to be £2,100 per month.

To know more about, LRSG (Open), please visit this site

4. One-Off Top-Up Grants

Just last week, Chancellor Rishi Sunak announced another program to help businesses survive this third national lockdown.

This new financial aid aims to help businesses that are under the hospitality, retail, and leisure sectors with physical shops that are forced to close.

  • Shops with a rateable value of up to £15,000 will be eligible to claim up to £4,000.
  • Medium-sized shops with a rateable value of £15,000-£51,000 will be able to get a grant for around £6,000. 
  • The larger businesses that fall under more than £51,000 rateable value can receive a grant of around £9,000.

5. Temporary Cancellation of Business Rates

This is another financial support for businesses that have physical shops under the retail, leisure, and hospitality sectors. The government knows just how great the financial impact of the pandemic is to businesses, no matter the size.

So with this fact, businesses under the sectors above with a rateable value of less than £51,000 will not pay any business rate for the year 2021.

You’re eligible if you own a:

  • Shop
  • Hospital property
  • Hotel
  • Restaurant, cafe, or pub
  • A cinema
  • Leisure properties

6. Bounce Back Loan Scheme

The Bounce Back Loan Scheme or BBLS was made for small and medium-sized businesses. This government Covid support scheme provides loans for employers around £2,000 and £50,000.

The government also mentioned that the loan will be interest-free for the first year before a 2.5% annual interest was to be added. The duration of the Bounce Back Loan was 6 years but business owners have the option to extend the term to 10 years.

You can only apply for the BBLS if:

  • Your business is based in the UK
  • Was established before 1 March 2020
  • And has been greatly affected by the pandemic

To know more about the guidelines of the BBLS, you can read more here.

7. Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme or CBILS was announced on 23 March 2020. This financial help was aimed to support small and medium-sized businesses across the UK who are suffering from revenue loss and disruption of cash flow due to the pandemic.

Some of the features of this financial scheme would be that businesses will be able to loan up to £5 million with repayment terms of up to 10 years. The Government will also pay the interest and fees for 12 months.

You can apply for this if:

  • Your business is based in the UK
  • It is a small or medium-sized business with an annual turnover of up to £45 million

8. Coronavirus Future Fund (Withdrawn)

The Future Fund gives out government loans to UK-based companies at around £125,000 to £5 million. These loans can greatly benefit businesses that are in their early stages of research and development, who are not yet making significant revenue and profits.

These businesses can also look towards equity investments more since they can’t leverage other government programs.

Your business is eligible for this type of support if:

  • It is UK-incorporated – if your business is part of a corporate group, only the parent company is eligible.
  • Your business has raised a minimum of £250,000 in equity investment from third-party investors in the last 5 years.
  • Its shares are not traded on a regulated market, multilateral trading facility, or other listing venues.
  • It was incorporated on or before 31 December 2019.
  • Your business meets at least one of these conditions – half or more employees are UK-based and at least half of its revenues are from UK sales.

Applications closed on 31 January 2021.

9. Protection From Eviction

The government announced that commercial tenants who can’t pay their rent due to the effects of the pandemic will not be evicted. However, if your business is able to pay rent it may be smarter to do this now and avoid building future debt.

Of course, if you have very tight cash flow – or just one-way cash flow – as a result of the pandemic, it makes sense to use this government Covid support scheme to spread out the financial impact over a longer period.

10. Self-Employment Income Support Scheme (SEISS)

The third grant of this scheme is from November 2020 to January 2021. This can pay 80% of your average business earnings for three months but with a cap of £7,500. But as mentioned by the government, if you were not eligible for the first and second grant, you won’t be eligible for the third.

As for the fourth SEISS grant, it would be from February to April 2021. No further details were announced by the government since it’s still in the process of being reviewed.

Look Beyond The Help Of Government Covid Support

The government is being surprisingly generous to help small businesses survive the ravages of the pandemic.

But if your business is relying upon this financial aid and support it is only going to help it survive for so long. You should certainly take advantage where you can to keep things afloat in the immediate short-term. At the same time, you must look to adapt to the changing business environment, developing your business, and strengthening it for the long-term.

So roll up your sleeves, put on your thinking hat, and go to work.

Plan And Strategize

Rather than completely relying on external help, you also need to put in the time and effort to consider what in your business could be changed to make it more relevant during the pandemic. 

This starts with considering the changing needs of your customers. What has changed for them? What new problems do they face? What new needs might they have that you can solve? If you can address these, your business can be profitable despite the lockdowns and limitations inflicted by the coronavirus. 

This might mean having to introduce a brand new product or service at one extreme. Or it may mean offering some kind of delivery, click-and-collect, phone-ordering, or other twists on your existing services. Creative leadership is essential right now.

As I mentioned in my Coronavirus Business Continuity Plan, having a strategy in times like this will give you alternative ways to continue doing your business. In the same post, I mentioned 6 aspects of your business that you need to consider when writing a continuity plan. 

If you don’t have one yet, I strongly recommend you take a look and create one immediately. The sooner you act, the better the position of your business. It’s not realistic to expect government Covid support to protect every single business.

Get Some Independent Help

I’m a business coach and I’ve worked with hundreds of businesses in the UK and internationally to help them grow and turn things around when they’ve not been going in the right direction, or moving quickly enough.

I help businesses to improve cash flow, increase profits and grow sales, even during the COVID-19 pandemic. If you want to know where to start improving your business, a great place to start is with my free book, 101 Tactics To Get More Customers, Sales and Profit.

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Lee Duncan

Lee Duncan is the author of "Double Your Business: How to Break Through The Barriers to Higher Growth, Turnover and Profit", from Financial Times Publishing. He teaches the owners of small to medium businesses how to make more profit and enjoy more free time.

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