UK businesses in the retail, hospitality and leisure industries – which will be closed until mid-February because of the current lockdown – will be able to claim new one-off business grants of up to £9,000, Chancellor Rishi Sunak has announced.
Here’s everything you need to know about the new grants.
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Who will be the main beneficiaries of the new business grants?
More than 600,000 struggling businesses will benefit from the new grants. These include pubs, bars, restaurants and leisure centres forced to close because of coronavirus lockdown restrictions. Businesses will not have to pay the money back.
Rishi Sunak said the extra cash would “help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen”.
How much will each business get from the new grants?
The payment will be based on the size of each business property and the business rates that it typically pays.
Here’s how the money will be awarded:
- £4,000 for small businesses with a rateable value of £15,000 or under
- £6,000 for medium-sized businesses with a rateable value of between £15,000 and £51,000
- £9,000 for larger businesses with a rateable value of over £51,000
What other support is available for small businesses?
The new business grants add to other existing support, including grants worth up to £3,000 for closed businesses, and up to £2,100 per month for affected businesses once they reopen.
The government has made a further £594 million of discretionary funding available to local authorities to support other impacted businesses.
If your business is not eligible for the new grants but has been affected by the restrictions, you are encouraged to apply to your local authority for support.
You can also apply for the furlough scheme. This pays employees up to 80% of their wages and has been extended until the end of April.
The chancellor also previously introduced a business rates holiday for some of the hardest-hit industries in the country, including retail, hospitality and leisure. However, these are also due to expire in April.
Government-backed loan schemes are still in place and will remain open at least until the end of March. These include the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, and the Bounce Back Loan Scheme.
The government has already announced that it will make more support available beyond March through a successor loan scheme. We expect to get more details on this in due course.
The government is likely to provide updates on wider Covid-19 economic support when the budget is announced on 3 March.
What about the self-employed?
The chancellor did not announce any additional support for the self-employed.
However, applications for the third phase of the Self-Employment Income Support Scheme (SEISS), which covers 80% of average monthly profits, are still open.
Protecting your finances
The new grant will be welcome news for business owners nationwide who have been hit hard by the pandemic.
But Mike Cherry, chair of the Federation of Small Businesses (FSB), has already warned that it might not be enough to “match the scale of the crisis that small firms are facing”.
As a small business owner (regardless of the industry), you might need to take extra steps to brace yourself financially.
For example, now could be a good time to consider ways to improve your business cash flow. It could also be worth seeing if there is a better business credit card out there to meet your current needs.
Such small steps could go a long way toward helping you keep your business afloat during these tough times.
For more useful tips on protecting your finances and preparing for whatever lies ahead, check out our Coronavirus Money Guide.