Guiding businesses through the financial impact of COVID19

Andy McKenna, Sheffield City Region Growth Hub Access to Finance Advisor, offers guidance on what financial support is available to help businesses stay afloat following the coronavirus pandemic and the impact of the UK lockdown.

“More companies have returned to work following the UK lockdown and although this feels like a step towards normality, in reality it’s far from it for business owners. With strict social distancing rules in place, many businesses have had to reduce the number of staff per shift, especially those working in sectors such as manufacturing and construction where employees often need to work side-by-side. This has resulted in a reduction in the number of orders/projects they can carry out at any one time, which, as expected, is impacting their productivity and profits.

In addition, as pubs, restaurants, shops, hairdressers and other consumer-facing businesses are operating with reduced hours or restricted customer numbers, they may be facing a significant drop in income.

As a result, a wide range of businesses across the Sheffield City Region are facing difficulties that they could never have prepared for. This includes an unprecedented level of financial uncertainty and the fear that should things not improve, they may get to a point that they won’t be able afford to open their doors again.

Although the Coronavirus Job Retention Scheme (CJRS) will end soon, which helps employers to pay salaries for furloughed employees during the lockdown, thankfully there is still plenty of financial support available to businesses and self-employed workers across the Sheffield City Region; and the Growth Hub is here to guide you through the most suitable. These include:

  • Bounce Back Loan Scheme (BBLS) – Great for small business owners who can apply for a loan of up to 25% of their turnover (classed as a fast-tracked loan of between £2k and £50k), interest free and fee-free for the first 12 months. Be quick though, the deadline for applications is 30th November 2020.
  • Re-Start to Growth – A free support initiative where you will have access to experienced and skilled experts to help assess, plan and restart your business through an agreed programme of intensive support.
  • Self-Employed Income Support Scheme – The scheme has now been extended so that, from November, self-employed individuals can apply for a grant to cover a percentage of their average monthly profits that they earnt over the last three years of trading. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January 2021, worth 20% of average monthly profits, up to a total of £1,875.
  • The Job Retention Bonus – a one-off payment of £1,000 per furloughed employee who is still employed on 31 January 2021. Employers will be able to claim the Bonus for any employee that they have claimed a Coronavirus Job Retention grant for, but they must have been continuously employed until 31 January 2021 and have earned an average of more than £520 per month in November, December and January. Applications open in February 2021.
  • New Jobs Support Scheme – A new six-month Jobs Support Scheme will start in November which will see the Government directly support the wages of people in viable work. Businesses facing reduced demand can avoid making employees redundant by keeping them on shorter hours. The employee will work at least a third of their normal hours paid by the employer. For the hours not worked, the government and the employer will each pay one third of their equivalent salary, capped at £697.92 per month.

The government also recently announced in its Winter Economy Plan that there will be further flexibility on tax payments and businesses which deferred their VAT will no longer have to pay a lump sum at the end of March next year. They will have the option of splitting it into smaller, interest free payments over the course of 11 months next financial year. Plus, Self-assessed income tax payers who need extra help can now benefit from a 12-month extension on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

For businesses that don’t quite fit the criteria for the above there are other options available provided by your local authority. At the Sheffield City Region, we currently have multiple grant schemes suitable for smaller, independent business and those that ‘fall through the gap’ or struggle to qualify for the main grants currently available.

For example, the government recently announced a new fund to support small and medium-sized businesses to help further mitigate the impacts of COVID-19. Eligible SMEs can apply for grants of between £1,000 – £5,000 to help them access specialist professional advice such as HR, accountants, legal, financial, IT and digital, and to purchase minor equipment to adapt or adopt new technology in order to continue to work or diversify their business to suit the current climate.

It is important however to remember that grant schemes and financial support initiatives are an ever-changing landscape, and with funding options becoming available regularly, you should stay in contact with our Growth Hub Advisors for details of the latest support available.

For businesses running low on funds and struggling to pay bills, it is essential that you keep in contact and be honest with your banks or lenders and let them know about the difficulties you are facing. It is likely your financial manager will have a plan of action in place, which could include payment holidays, and together you may be able to develop a strategic way to help you through it. Not staying in touch and burying your head in the sand in these situations is one of the biggest mistakes to make.

It’s also important to ensure you are managing your cashflow efficiently, reducing your outgoings where possible and keeping a small pot of money to one side for emergencies,

So, don’t struggle along alone, make the most of the support available to you and contact the Growth Hub – especially if you are a business that has been affected by the lockdown and need help to recover lost ground.”

For more information about how the Sheffield City Region Growth Hub can guide you through the various levels of support available, contact our team on 03330 00 00 39 or Email: