Business grants and loan extensions for Lockdown 2.0

business grant

Date

Nov 11, 2020

Categories

Covid-19

The government has acknowledged the effect of restrictions on hospitality, leisure and retail businesses by announcing the availability of new business grants for Lockdown 2.0, as well as the establishment of a local authority grant fund worth £1.1 billion, and the extension of access to government-guaranteed loan schemes.

 

Who is eligible for the new business grants?

The business cash grants, initially available to affected businesses in Tier 3 and then Tier 2 areas, will now be available on a national level in order to provide support with fixed costs. The grants will be worth up to £3,000 per month payable every two weeks, compared to up to £1,500 every three weeks which was available previously. This could benefit over 600,000 businesses, including nightclubs and bowling alleys that were previously not included in the local lockdown grants.

Local authorities will receive the funding to support businesses in their area that are forced to close due to national or local restrictions.  Grants will be based on the rateable value of a business, as follows:

  • For properties with a rateable value of £15k or under, grants will be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k, grants will be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over, grants will be £3,000 per month, or £1,500 per two weeks.

The grants are also retrospective, and can be back-dated for businesses in Tier 2 or 3 in England. Those in the hospitality, leisure and accommodation sectors that suffered due to local restrictions introduced between 1 August and 5 November, will be eligible to receive back-dated grants at 70% of the value of closed grants, up to a maximum of £2,100 per month for this period.

Local authorities should be in a position to start making distributions from mid-November, and funding should reach businesses in advance of the Christmas period.

 

Additional local authority funding

As well as business grants based on rateable values, local authorities will be able to make additional distributions from a one-off funding pot made available.  This funding has been calculated based on approximately £20 per head of population in each area, and is worth a total of £1.1 billion.  It is for local authorities to distribute based on their discretion, and is designed to support businesses more broadly over the coming months.

 

Guaranteed loan extensions

As a result of the second national lockdown, the government has extended the application deadline for its guaranteed loan schemes.  This includes the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme.  These schemes were due to end on 30 November, but loan applications can now be made until the end of January 2021.

The Bounce Back Loan has also been adjusted to allow for top-ups.  This scheme helps SMEs to borrow between £2,000 and up to 25% of their turnover, up to a maximum of £50,000. The government guarantees 100% of the loan, and there are no fees or interest to pay for the first 12 months. After 12 months the interest rate is 2.5% a year.  If you have already taken out a Bounce Back Loan but borrowed less than your maximum (i.e. the lower of £50,000 or less than 25% of your turnover), then you can now top-up your existing loan. Businesses will be able to take up this option from mid-November, but you’ll only be able to make use of it once.

 

If you have any questions about business grants, local authority funding or guaranteed loan schemes then please contact us and we’ll be happy to help.

 

 

Summary
Article Name
Business grants and loan extensions for Lockdown 2.0
Description
The government has announced the availability of new business grants for Lockdown 2.0, as well as a local authority grant fund worth £1.1 billion, and the extension of government-guaranteed loan schemes.
Author
Publisher Name
Paish Tooth
Publisher Logo