Companies and sole traders in and around Doncaster can take advantage of a range of government initiatives post-coronavirus, as businesses continue to try to navigate through these challenging times.
If you run a company or sole trader business in the area, emergency funding via government backed loan schemes may be appropriate for your needs. Alternatively, you could be eligible for income support as a sole trader or self-employed person.
Self-Employed Income Support Scheme (SEISS)
Applications for SEISS, the government’s scheme to help sole traders and the self-employed affected by coronavirus, began on 13th May - you can check your eligibility on the gov.uk website.
Under the scheme you may be entitled to a taxable grant of up to £7,500 based on 80% of your average monthly trading profits over the three tax years from 2016/17 to 2018/19. If you are eligible to apply you will be given a specific date to do so, and you can continue to work in your business if you receive the grant. SEISS is paid as a single payment into your nominated bank account, and should arrive within six days of making your claim.
Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS offers loans of up to £5 million to SMEs adversely affected by coronavirus – 80% of each loan is guaranteed by the government. The first 12 months of interest is also paid by the government, as are all lender fees.
You may be eligible for CBILS if your turnover is up to £45 million, and your business is based in the UK. Various forms of finance are available under CBILS, including ‘alternative’ funding such as invoice finance and asset finance.
You will need to provide management accounts, cash flow forecasts, a business plan, and other documentation to the lender as you would with any ‘standard’ business loan, and there are 50 different lenders taking part in the scheme.
Bounce Back Loans
The Bounce Back Loan Scheme (BBLS) is aimed at small and medium sized businesses, and allows access to emergency funding from £2,000 up to 25% of turnover (maximum £50,000). The scheme is open to UK-based businesses formed before 1st March 2020, which have been negatively affected by the pandemic.
The government is backing 100% of each loan under this scheme to encourage lenders to help businesses in dire need. The government is also paying lender fees and charges, and all interest during the first 12 months, after which time interest will be charged at a rate of 2.5% per year.
It is worth noting that if you have already obtained a CBILS loan you will not be able to apply for new funding under the Bounce Back Loan Scheme, but you can transfer a CBILS loan of up to £50,000 to BBLS.
Company directors in receipt of dividend payments
Unfortunately, some limited company directors remain unable to obtain financial support from the government at this time. If the majority of your pay is made up of dividend payments, the government has stated they are unable to cover these amounts.
The government is also unwilling to amend the Self Employed Income Support Scheme to incorporate dividend payments, which is likely to cause financial difficulty for directors in this group.
In these difficult times, professional advice on the potential options available to you is invaluable. To arrange a free same-day consultation please contact partner Mike Jenkins and his team at your local Real Business Rescue office in Doncaster. They can discuss your situation and explain the possible rescue options appropriate for your business.